Help! Nightmare situation, property manager and tenant blues.

[Jessica Deratany]

*breathes deep* Okay here goes, I need help. Property located in New Mexico, very rural, very limited in choice in repairmen and no property managers. (First big mistake in buying there, we were living there at the time.) We found a property manager, family, have a lot of rentals themselves. PM rents out a house we own out to someone who did HUD. PM mentioned a few times that there was always headaches with this tenant but that she always ended up paying one way or another. The PM was never prompt on payments to us, so we never knew if the tenant was late or not, we never got statements. Fast forward 3 years, we finally just decide to manage from a distance ourselves and are made privy to a nightmare. The PM has still not gotten us the documents or given us a good briefing of what is going on, she is mad she is no longer managing our properties. So we know nothing.

What we do know now:

Tenant has changed locks.

House has some issue with sewer gas coming up into the home, which may have happened from property managers husband plumber fixing pipes as we did a huge repair and it started around then.

Tenant is now reducing rent by 1/3 legal in New Mexico because of sewer gas.

People who we have tried to look at the property to fix the problem have refused to work there because the tenant is freaking them out and talking about lawsuits and looks like she is on drugs.

People now keep mentioning drugs to us, but when we spoke to the officials they had no records of tenant other than a fresh eviction before our house. 

Tenant has no phone, email.  Only has a PO box and a friend at a local business who will take messages(and also gives her legal advice).

I have given 30 days notice, but I'd bet money she wants to take this to court ect.

I want to try to do a cash for keys but I am not hopeful (I tried once already and she ignored it).

Help, is there nothing I can do but brace for the pain?