How to Cancel Lease Before Tenants Occupy - True Colors Shown

[Burt L.]

Appeal to BP Nation- I have erred in accepting tenants and seek to cancel a lease before the tenants occupy. 

I went through my usual screening process which has treated me well for decades and it looks like I missed something on some tenants I accepted. The tenants were fine with the condition of the property and asked if there was going to be a professional cleaning and I said I"d never done that before and they agreed that no professional cleaning was necessary - the carpets had already been cleaned by a pro. 

On the date of move-in, tenants refused to take occupancy or move any items in, and said it had to be cleaned by a pro and wanted me to pay $350 to do so. They were absolutely freaked-out that they literally had "found a dead fly" on a countertop. I've already been threatened with legal action before ever taking occupancy. 

I can see this will be an extremely difficult tenancy and would like to return their monies in exchange for a lease termination agreement. I really think the one person has an undiagnosed medical/mental condition, despite their 800 credit score, etc.

In considering what their "damages" would be - they are living in the basement of the wife's mother, where they moved to take care of her after a surgery, shortly after their wedding - so their damages would seem minimal. They have a 5 year rental history as a couple prior to their wedding, before that. 

The lease agreement was made on July 28, though for some reason I signed my side of it on July 31 as I had in my mind that they could move in on July 31, despite signing it on July 28. 

They paid me in cash and are also besides themselves now - that they didn't get a receipt from me. I was given a deadline of yesterday to provide them with both a receipt and a statement that I will pay for the professional cleaning. I am told they have a relative who is an attorney, etc. I haven't mentioned that I want to cancel the lease yet but the best time to get rid of a problem seems to be before it moves in, so to speak. There is no shortage of interest in the Denver, CO market. 

The tenants make 3.1 times the rent (which is acceptable) and so are close on the rent/income ratio and not especially "long on cash". If I say I will return their monies of $3700 in full for a lease termination agreement - or they can take me to court - they would probably choose to have their money back now so they can pursue another property. 

How can I exit this situation, as I now know the character of the persons I"m dealing with? The escalation/controlling during phone conversations has been unbelievable. 

There will probably be another dead fly in the property -perhaps even a spider - before the lease would conclude and I just don't need to go through all this, especially in such a strong market. It seems I"ll be more their "employee" than their  landlord throughout the term of the lease. This would seem like the best time to assert myself. 

Help!