Tenants not on the lease threaten with attorney

[Darrell B.]

Hey Guys,

My brother has a rental in Shoreline, Washington and rented to a friend. Pretty standard SFH with a lease. The friend ended up letting one of HIS own friends live there with his wife and child while he lived somewhere else.(So for clarification, the friend that is on the lease is not living there while this secondary friend is living there with a wife and child). He did this with full communication with my brother and my brother was fine with the situation. The family living in the house pays rent straight to my brother as if they were the ones on the lease.

The friend that is on the lease still helped with communication between the family and my brother. As time went on there were some complaints about mold being in the home and my brother was quick to get the problem fixed. The family still complained about mold because their child had a health issue and the doctor says the mold was part of the problem. The family claims the home is unlivable and wants my brother to pay for their housing until the place can be livable. He has already given them 2 free months of rent during this whole process. The family mentioned they would seek out an attorney but we're not sure if this is real or just a bluff. 

Our thoughts are that they don't have any say on anything because there is no lease with them, so are they just squatters? 

Any advice or thoughts on them having a case with an attorney? Is this something we should not worry about and just get them out?