Water proof is not the same as odor proof.

He is a good tenant on a month to month lease so and I want to comply with his wishes but I am concerned that the ant colonies in the structure will get out of hand and cause mold and odor (per pest control guy).

The new owners had to have the heating ducts cleaned because they are allergic to cat odor.

We cracked open the door and a decaying odor smacked us in the face like a sledgehammer.

You can try OdorXIt, which is a product that is very effective in removing odors.

Search BP for information on "cat odor".

I've since rescinded the ban with only a rule that smokers will pay for odor removal, cleaning, burns, etc.

In addition to removing lower portions of walls, I recommend Kilz stain/odor blocking on all surfaces, even the ceiling. 

I can smell a very strange odor coming from their upstairs rooms (again, their apartment is attached to my house) and it’s so strong that it’s coming through my guest bedroom and even into my landing.

OK, (grumble, grumble) I agree with Dave Meyer....live with the folks and get that bugger rented!