I ended up opting to restore the alley access to the property and had to put in a couple of retaining walls to create two off alley parking spots, which is huge in Seattle.

Obviously you will need to consult your local laws and probably retain an attorney since this guy has clearly stated his unwillingness to move out without much drama.   

She is a decent tenant and would like to retain her tenancy but just cant eat the cost of utilities this coming lease renewal.Ron

And, they kept the rights to the minerals under your property.Not only that, but they retained the right to come dig under your property at any time.  

WA statute RCW 59.18.280 requires that Within fourteen days after the termination of the rental agreement and vacation of the premises ..... the landlord shall give a full and specific statement of the basis for retaining any of the deposit together with the payment of any refund due the tenant under the terms and conditions of the rental agreement.They left the unit in reasonable condition, but due to damages done by their small children denting the wood framing around the interior doors along with a bunch of other items needing to be fixed and/or repainted, I spend more than $1100 and sent them an itemized statement showing my costs for labor and materials, which consumed their entire deposit. 

Obviously, you can approach it with less of a profit mindset, and thereby retain some of the renters.

If she moves out but retains the key to clean out and get the rest of her stuff out, she has not moved out at all.

If you factor in a retainer (close to $5000 if not more) and then the wasted time of LONG legal processes and stress from dealing with it your probably better off just learning from it and moving on.

As part of the lease agreement, the LL retained one of our three attached garages unavailable to us.

I am running out of ideas to recover this $2000 from hera) Retaining a lawyer starts from $3500, so it is ruled outb) I am out of state landlord, so I dont know if it is practical to approach small/petty claims court. c) Some one tells me I can directly go to collections, but I donot know where it takes me to.At the least, I want this issue to appear in her rental records, credit records (and possibly court records), so that she would not go scott-freeWhat are my options in a) trying to recover the damages and b) reporting the tenant  to credit/rental/etc bureaus.