Look really understanding and concerned and say really nicely that you can't find any evidence that there is a lingering problem but, you'd be happy to let them out of their lease with really fair terms.My experience dealing with tenants who started threatening to leave, is that when I'd actually offer them the option of leaving - they'd be kind of shocked and start back-tracking.I'd follow-up any discussion of offering to let them out of their lease in writing - email is fine. 

She's threatening to take us to small claims court to get all of her deposit back. 

You can be firm, but non-threatening.

A week passes no check, tenant stalls some more, my son threatens to file with Landlord tenant board.

They said they threatened to shut off the power but never actually did it.

You don't need to threaten her with taking her security deposit, but in most states security deposit can be used to satisfy rents owed, so that is implied.I have had several tenants break leases.

And, if you ever end up in court, it will be apparent to the judge that you were trying to avoid court, and were dealing very openly with the tenant, including letting them know of their rights and remedies.Tenants who start acting in a threatening way regarding habitability issues, often just want out of the lease, but they won't ask straight out if you'll let them out of the lease, or they don't want to pay the termination fee.  

And give them a fax number to fax it back to me.Then, if the applicant actually provided this, I'd Google and make sure this medical fax number is from a bonafide medical office.And don't be intimidated by a tenant who threatens to complain to HUD if you do this and deny them.  

I'll spare the details of long emails and voice mails that they have sent threatening us with all sort of legal action, etc. if we do anything to work on the unit that disturbs their well-being, or do anything that seems retaliatory.

Yeah, I was thinking that threatening the mama of a bunch of bikers probably wouldn't go well.