Maybe letting them go is better for everyone? However, keep in mind that neighbours sometimes push the boundaries if they own and next door rents. They sometimes think they have rights to your property. I feel sorry for your tenant but it's too late now. Tell your neighbour (s) to back off and pull their heads in. They have no doubt crossed a line. If you think you can sort your tenants out, I would try to do that. They will be forever grateful. Get a new PM.