You’re doing the right thing by jumping in and learning through action.

But owners have to be held responsible for their pets' actions.

No action by the judge.An investor called me last week to tell me he had approached the foreclosed upon owner and purchased the right of redemption.  

I can see this becoming a major problem in the future so I wanted to have a plan of action.

The initial action is more like a lis pendens in function I think.

I would imagine the best actions would be to immediately fire the management company, pass the keys onto a new one, sue the old one in small claims court for the listed damages.

Having this will provide focus and intentionality in your actions.

Should I continue mediation or pursue legal action (considering the time and costs involved)?

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If the seller misrepresented tenant conditions, consult a real estate attorney about potential legal action.