@Jhansi B.
I see mainly two issues here:
1. tenant didn't pay rent and complained about living condition.
2. landlord didn't repair leak that has already caused mold.
I don't know about other states, but in CA, there's something called "withholding remedy" http://www.dca.ca.gov/publications/landlordbook/repairs.shtml which allows the renter to withhold rent for certain repairs. I use a licensed process server for all my 3-day notices. He regularly has to be in court to provide "proof of service". He told me that the #1 reason landlords lose in court is MOLD issues. Not only that the tenant can sue you for any mold repeated health problems. eg. if she gets a doctor on her side to prove that the mold is causing her child to develop asthma, you're in for a LOT of money (in the worst case). Also in CA, you can't retaliate a renter's complaints by eviction. See http://www.dca.ca.gov/publications/landlordbook/retalitory-actions.shtml In your case, if you try to evict her now, the Court might see it as retaliation if she has a good lawyer to argue that way.
Now let's break down the cost for you if you go to Court.
1. Filing UD and win, your cost ~= $1000+ assuming she doesn't contest.
2. If she does (which is most likely in your case), $300/hr * 1 or 2 hours lawyer fee.
For her, if she is poor, the cost is zero including suing you for health damages. It is because in CA, she can get the Court to waive her filing fees and get a legal aide lawyer for free. If her damage case is strong, she might even get a real lawyer that gets paid from the payout amount. If I'm going to Court, I want to make sure I'll absolutely WIN. This way, at least I can get a money judgement in my favor.
Disclaimer: this is not a legal advice. If I was you, I'd
1. Send her a certified (traceable) letter stating that mold is VERY dangerous and ask her to temporarily move out while you fix the problem. In CA, the tenant is credited on a per Diem basis during repair.
2. Get a LICENSED and BONDED mold and restoration company to fix the problem asap.
3. After everything is fixed, serve her a 3-day notice with the credits (you might want to add some for inconvenience) deducted from the rent.
4. Serve a 30-day termination notice because she had one more pet. But if she complies with your new terms, you have to let her stay.
The key to winning a case is to show that you have made reasonable efforts to fix ALL the problems you're supposed to, and not letting the renter to have ANY excuse. Maybe I'm being overly cautious, but as a landlord/business owner I can't afford to lose a Court case.