If she has a term lease, check your local laws but here (and most places) you can put a 30-day notice to cure on her door then if she fails to cure the problem you can file on her for breaching her lease agreement.

If so, depending on the terms of the existing Rental Agreement and local law, fund the SD out of Rent Payment first, then invoice her for short rent and late fee, with a deadline of X days to "cure" the breach of contract.

Send her the legal requirement (3 day cure or quit or whatever it is in your area) to fix the problem and notice that if not fixed an eviction will be filed. 

The lender on your new build would run a title search and demand that the previous lien be cured (paid off) before they would lend you the money for the new build on that parcel... otherwise the old loan could take possession of the new buildings on the property, which your new lender would not allow. 

It's like a doctor if he becomes sick, can surely try to cure himself but it's good practice for him to get checked up by another doctor.

Another way to "cure" this issue is to do rent increases until he leaves, I prefer this over terminating a rental agreement...

Buying right cures most if not all "what ifs".

When the foam cures, tape a clear sheet of plastic over the filled hole and monitor the plastic for a week.

There are exceptions where you can do an escrow hold back if the "Cost to cure" is generally under $2K or you have a seller amendment to cover the cost and then they will hold it in escrow until repaired to release funds to vendor with proof or receipt.You have Fix & Flip loans but they an be a nightmare and the rates and points are excessive. 

The statement shall be given to the tenant, if the tenant is present for the inspection, or shall be left inside the premises.(3) The tenant shall have the opportunity during the period following the initial inspection until termination of the tenancy to remedy identified deficiencies, in a manner consistent with the rights and obligations of the parties under the rental agreement, in order to avoid deductions from the security.(4) Nothing in this subdivision shall prevent a landlord from using the security for deductions itemized in the statement provided for in paragraph (2) that were not cured by the tenant so long as the deductions are for damages authorized by this section.(5) Nothing in this subdivision shall prevent a landlord from using the security for any purpose specified in paragraphs (1) to (4), inclusive, of subdivision (b) that occurs between completion of the initial inspection and termination of the tenancy or was not identified during the initial inspection due to the presence of a tenant’s possessions.Emphasis is mine.