The tenant got bed bugs and decided to "fix it" herself and hired a company to come do it without calling me.

That's not really a full story so it's hard to say, but generally, if you don't feel secure or confident in the person you hired, you shouldn't have hired them.

The service fees end up being around 20.75% if you hire a "host" or property manager to make the investment as passive as a long term rental. 

Is the assumption here that it's owner-managed and the owner is hiring help?

The P&L isn't going to tell you that, you need to see the Balance Sheet.Put it simply, if an investor decided to hire someone like me to start handling their books and have to gather their financial statements, I would be charging an arm and leg to put it correctly.

The entire reason I hired a company is they are the experts and I expect them to take full accountability of making sure I am in the know and 100% compliant.

(It's funny now) I hired a property management company and sure enough they told me the best qualified renter was the one who wanted to do a 9 month lease and pay it all upfront.

Honestly, hiring a lawyer might end up costing more than the process itself, especially if things don't go in your favor.I’d recommend approaching the neighbor directly to discuss it, making sure they’re aware of the serious safety risk.

From everything I hear the costs exponentially grow when a PM hires out your repairs/maintenance compared to the cost of you source the work yourself.

So, if someone hires me to build something for them...I charge around that price.