The owners of land in the Marshall Islands leased to Nauru are demanding 600,000 US dollars from Nauru to clean up the prime real estate in the capital, Majuro.
This comes as Nauru's Foreign Minister wrote to his Marshalls counterpart, saying his government has decided to relinquish the lease it has had since the 1970s.
The Marshalls President, Jurelang Zedkaia, stepped up his effort to gain a court-ordered eviction of Nauru government representatives from the former Eastern Gateway Hotel property.
He has also asked the High Court to award landowners the 600,000 dollars compensation from Nauru for allegedly breaking the terms of its lease.
President Zedkaia says it has 30 years left and contains a provision that if Nauru leaves early, it must pay future rent.
At one time, the Nauru housing area was considered one of the best accommodations on the capital atoll, though in recent years it has fallen into disrepair and neglect.