It's best to catch bees with honey rather than vinegar so try to keep this neighbor and your relationship on a good level and not a confrontational one.Politely tell him that you looked into the situation and that he or his insurance could be liable for any damages to the structure of your garage.

Do it matter of factly and non-confrontational, highlight the date/time you noticed the problem, when you originally communicated it, and who you communicated it to on that date.

After confronted, he said he took it down when we would not let him out of the contract.

Title companies don't just ignore liens and when confronted say "you go figure it out."

I know I need to confront him, I just don't know what level to approach him with.

Increasing rent seems like a confrontation.  

You can be forced to address / correct complaints without the benefit of confronting your accuser or having real proof. 

If they told you to F-off then I can only assume you were confrontational when talking to them.

My nice tenants are afraid of confrontation especially I think is because they have a very pretty teenage daughter.

If you do confront him, which it sounds like you really want to, bring a witness.