Tenant gave notice they are breaking lease early

[Andrew DeB]

So my tenant signed a 1 year lease that ends july 31st 2016. He moved into my 2 bedroom suite with his 21 y/o daughter. 6 months into the lease he told me he had a family emergency and needed to leave the province. Before telling me this he had one of his daughters friends move in to take his room. I never OK'd this but the daughters been paying me rent every month via e-transfers so it's been fine.  On June 3rd the lease holder phoned me and said him and his daughter are having money issues and they are moving out this month. They said they are using the damage deposit as rent. I said that's not how it works but i can't force them to pay rent and reminded him his lease isn't up until end of July.

Now because i received no rent for this month should i be serving them a N4 form/2 weeks notice for non payment. Just in case they don't move out when they say they are? And i intend to take him to court for the remaining months rent and there will likely be a couple hundred in damages from the condition they are treating the property and utility bills. However if i serve this non payment of rent form would i be legally evicting him not enabling me to take him to court for the remaining month of the lease? I'm not sure how to go about this as i can't technically start finding another tenant because what if i sign a lease with a new tenant for July 1st, then the current lease holder pays me Junes rent then he has the place for July as well.

Also if i were to take this to court later on, since his daughter has been paying rent the past 6 months am i allowed to go after her as well for any damages/utilities/July rent?

Appreciate any insight on how to handle this! Thanks!