Hello Bayareasaver,
Thanks for keeping us up to date. I think you've gotten really great advice. I wanted to add a few points.
1. IMO, the tenants did exact what they were supposed to do. They are both jobless (but almost certainly collecting unemployment) due to a pandemic and wanted legal advice/second opinion on their options. Please keep in mind, in the bay area, there are flyers on every corner with free tenant rights attorneys that are posted by the city/county/you name it. If I were in their shoes, I absolutely would have called as well. I don't personally consider this "lawyering up" (it was just a free 10 minutes phone call). The non-profit organization they consulted with also will not be taking this case because Bayareasaver is doing the right thing and the letter implies that. The letter was also very fair IMO considering the circumstances. Keep in mind, the bay area is crazy right now with "don't pay rent" and they are most certainly influenced by that non-sense. I would also throw it out there that my guess is that if the tenants refused to pay the last 6 weeks of rent, with everything going on, you would have no recourse (with you being on another continent and all the other non-payments this would take forever and tons of $$ + too much hassle).
2. Regarding their request of 6 weeks forgiveness. I wouldn't commit to it, at least not in writing. I like the previous poster's idea of 100% plus X% deposit refund if they leave the home in great condition by the agreed upon date. In the bay area, I also wouldn't risk holding their deposit for unpaid rent, especially with COVID going on. I agree with Walt too that any back door deal would be risky just because you don't have a personal relationship with the tenants. I would personally keep handling this the way you are doing, professionally and with a lawyer, and then once they are out decide on how much to "reward" them or not. For reference, my landlord friend went through a similar scenario as you (had to ask the tenants to leave during May) and he offered one month free rent.
3. For what it's worth, the tenants still sound like decent people and good tenants. I would include in the letter how you value them and how you would give them a good recommendation to their next landlord (assuming they hold their end of the bargain).
4. 24k sounds very high for carrying costs and paint job. Exterior paint shouldn't be more than 2-4k unless you have some really bad siding and extra work is needed for prep and/or just overall difficult painting obstacles due to layout of exterior. With that said, do paint :)
Best of luck!