Speed racer my husband is in Virginia today on business and he says its lovely there and that's where we should be living!!!
Nik There is nothing you can do. It sounds awful but its essentially none of your business what they do on their property with their horses. These people are like a disease spreading through the horse world - I think they get infected with all the crap they watch on Youtube.
You should get the boundary issue resolved though - forget the sympathy woman on her own stuff - the longer its left like that the more chance they have of establishing it as their own. You are aware of what they've done and by going nothing and not charging them rent for that little bit you are establishing their rights for them to stay on it
Get something in writing to your zoning officer ASAP
Here in CT town we have a law that says how far horses and livestock can be from a boundary fence - its a pain in the ass but it actually means that you have to have a fence within a fence to prevent your animals from leaning over the actual boundary into someone elses property
We also under CT law have to provide either a stable per horse or sufficient run in shelter space per horse
Lastly many Counties and towns in the US have zoning laws that govern the number of horses you are allowed to keep per acre of land
All worth looking into as may be your only way to do something to ease the situation