Tenant moved out daughter moved in. Trashed house. Current rent

[Justin C.]

I visited one of my rentals yesterday and verified what I thought was happening the last few months.  I own a C- grade single family home that is currently renting for $650 + $25 pet fee which is about $75-100 under the current market rates.  Lease has 1 lady and 1 cat as occupants.  Said lady has moved out and her daughter and boyfriend have moved in, including the original cat and now a small dog.  I went to check on gutters yesterday and noticed the TV on.  Knocked on the door and these answered.  I didn't go in but noticed it was trashed and they were uneasy for sure.  I have an official city inspection Monday 4/4 for the whole house.  Lease is up end of May.  Rent has always been paid on time and without issue.

I realize timing couldnt be more perfect to address this issue.  Here is how Im going to proceed... please let me know if I'm off:

- original tenant have been made aware of this inspection 1 month out, then 1 week out.  I've told her she does not need to be present but is welcome too

- I'm sure I'm going to find the whole house is trashed and not just the living room that I saw.  If damage, then eviction.  If no damage:

- Call and explain she hasn't held up her end of the lease

- End current lease with no penalties in exchange for the 3 of them being on a new lease renewed throughout May 2017 at $750 + $25 pet fee.  

If they are not acceptable to this, then I will be forced to evict immediately.

Thoughts?