how would you deal? tenant not upfront and letting dog ruin yard

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The 1st 3 pictures are the lawn of our rental  (backyard) 1 year ago- same time. And the last 3 pics are of our current rental backyard. The lease ends at the end of April. I had been discussing renewing the lease with tenants until very recently- when I saw the backyard. We had a walk through- the time the tenant gave me that she was available was 7pm- on 2 days. So I came at 7pm, but it was too dark to see the backyard lawn. The tenant had not talked to me about there being any problems with the rental. But just prior to the walk through she told me that there were issues with the electrical in a guest room. She said she had her brother in law fix it. She didn't asked me if it was ok- she just let me know afterwards because she wanted me to give her a break on the rent. As I had been planning on increasing it- and told her this.

 Anyway-at the walk through they mentioned a few issues with the rental- such as pool pump was leaking. They never mentioned the backyard. I came back later to look at pool pump and noticed the backyard looked really bad- as seen in pics.

after seeing the backyard, I told the tenants I was not renewing the lease. We had talked about renewing the lease at the walk through. The tenant was upset the lease not being renewed , she  said she was a good a tenant and had complied with lease- and paid rent on time. Lawn care is supposed to be tenant responsibility.  But it appears their dog is digging up the year. I had talked to people with more tenant/landlord experience- they said don't give them a reason for non renewal- so you have nothing to argue over. And so I tried not to give a reason- I notified them and said- due to unforeseen circumstances- but the tenant wanted to know- I ended up making up a reason that had nothing to do with  the lawn. I feel bad for not just telling the truth in the 1st place. And I'm not sure how I should have handled it? However, I didn't really like the tenants- I got a feeling that they weren't trust worthy. For example, at the very beginning the tenant told me she didn't smoke and then after I had selected them to have the rental- she admitted she smoked but said she only did it outside. So I am ok with them leaving- but not happy about how it happened. Not sure if I overreacted. I think it will be expensive to fix lawn though.