Seller filled a vacant unit during the middle of our deal

[David Plaunt]

Would love to know any ideas out of this situation - 

Just had our offer accepted on a duplex in Minneapolis under the assumption one of the units was going to become vacant before we closed. Once we signed the paperwork, we see a brand new lease written to a person for 14 months to begin 2 weeks before we take ownership. 

This person was not background or credit checked by seller. And the selling agent advised tenant intends to have a significant other live with her who is currently not shown on this new lease. They wouldn't even offer any application by this person. 

I've ask seller to void the new lease and we offered some money to help get prospective tenant relocated. He wont budge. Threatened to go to court if we cancel. 

Would love to hear some ideas out of this peacefully. 

Thank you!