Send them a demand letter, threaten legal action, file suit, if at the end of the day you want your unit to be rented they can settle with you while leaving the amendment.

I've never been sued or even threatened with a suit.- Tom

Currently own a rental property in Virginia Beach and renting the MIL suite at the home I live in.My friend is going through a bitter divorce, they are desperate to sell their home ASAP and selling it for cheap.

Have you looked into perhaps getting an older bungalow and doing a second (or third suite)?

I get this letter saying really a bunch of nothing, asserting that I willfully with held the security so now I owe them double security and if I don't pay them by X date they are authorized to file suit in Vermont SUPERIOR court.So, can they actually take this to the superior court as even if they were to tack on lawyers fees I can't imagine it would make it past 5k?

Sharp doesn't mean an Armani suit. 

I am sort of semi retired now, but still involved in designing residential projects and in fact in the middle of my own residential development, a small one not more than 10 units, one, a mansion with a swimming pool and private tennis court and the other 9 units to be 3 bedroom 2 bath units stacked on top of each other using shipping containers. 

If the attorney says this is more suited to a limited power of attorney, then go for it. 

We ended up buying a house in Southside district (great for gameday), and may end up fixing up the master suite with separate entrance for AirBnB on special weekends.

It didn't mention any backing/guarantee, insurance requirements, or even background checks.You would need to go after the contractor and hope that he was sloppy in his entity creation or that the "other side of his business" still has assets and was part of the same entity.You also may be able to go back to the insurance company to see if they will help with the filing of the suit.