Threats were flying from both sides and the cops were called.

But he is obviously incorrect on the lack of disclosure it’s clearly in the rental agreement  If to the best of your knowledge, it doesn't have mold, then it is an empty threat. 

If she refuses to get out after 30 days, start the eviction process.In my experience, most people will accept the 30-day and disappear because they're not happy with you.

Take away the number of small businesses that are going to disappear.

I did this at no costs to the tenants.The dryer is still not fixed because of:Delivery isn't possible, deliver companies won't enter the propertyMeans they can't hookup or remove the dryer that is currently thereDryers are non-essential (Grosse Pointe is saying as of today they are though)Numerous threats by the City saying any work would trigger the $1000 fine. 

Otherwise, it doesn't seem like you sat around and did nothing, knowing that what the situation was.While the legal threat is almost assuredly just that (a threat) You might consider giving some concessions.

It's an empty threat 99.9% of the time.

Tax credits exist now - they will disappear especially as solar is now mandated in CA.

Do you know what happens if they break up and she disappears in the middle of the night?

I also had one tenant just disappear which made no sense because they would have saved some money had they contacted us to get their deposit back.