It is never okay with us to let a tenant deduct what they feel they are entitled to from the rent unless they have followed the exact procedure to do so as outlined in the landlord-tenant law for our jurisdiction.

I am clearly not an artist or even very good at drawing a straight line, so understand this is amateurism at its finest, but these before/ after sketches should give you an idea of the floor plan changes.  

I saw a post from Jerome he has a long procedure that makes me affraid I miss out something.

Every state has different bidding procedures and redemption period. 

Is there a procedure I need to follow before I take them to court?

What the redemption procedures are in NJ, I have no idea.

I put in work to clearly define my policies and procedures that I require my property managers to execute.

If so, then I would suspect  the same removal procedure will work.  

You must be civil and follow your state's eviction procedure TO THE LETTER.  

Also, accounting for flip is different from buy & hold or wholesale, so make sure your process and procedures are set up properly.