There are habitability standards specific to each location that you as the landlord would be responsible for. 

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processesWe recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

So I feel no guilt in exercising such when one person is impeding upon, creating harm to, others as in this case.     

A consumer who has been harmed can not file a claim against a businesses E&O insurance. 

If I were you I would make it a habit to raise rents each year to avoid situation like this were your now $600 lower than where you want to be. 

Mold can be harmful, so gear up with a mask, gloves, and goggles before attempting any DIY.

In addition to ensuring that the room is built to the proper load bearing capacity as @Mike Reynolds mentioned, you should also keep in mind that you need a second egress point, such as an egress window, for any habitable room especially if it is designed for sleeping purposes.

Focus on essential repairs to make the property habitable and attract new tenants.

In other words, if the property is habitable and no longer dangerous and someone could live there, it’s probably also ready for lease.Once the property is in service you can finish the renovation and deduct some of the costs as repair and maintenance expenses in the current year.

Don't rush into sealing; make sure it's truly needed and won't cause more harm than good.