I don't know whats its like up there in Jersey but down here in Florida you need to pull a permit before you do any Demo work The house next door to me was vacant for a long time someone finally bough it right away they came in and demoed out the whole place with out pulling any permits The city code enforcement went on the war path wound up costing the guy BIG in fines

If the tenant is likely long term I wound split the cost as they offered but that's a subjective decision.  

Reading the forums and listening to the podcasts helped tremendously while we licked our wounds.  

I thank my lucky stars I never did because I wound up in investing in Charlotte and doing much better than I would have anywhere in NY metro.  

I wound down my computer consulting business and transitioned over the next year to being a full time real estate investor.  

Call the veterans administration and ask about charity donations to wounded veterans.You can also call Habitat For Humanity for the same information.

Also, I wound up finding my cleaning service in a small hotel down the street from us.

Good luck and I wouldn't get too wound up over just 1 loan to an occupant.  

It might be the last to get hit, but the wound runs deep. 

So I wound up painting one wall, the ugly one again.