It's going to be tough claiming damages against the niece if the co-owner is going to say "I gave permission for everything she did" and decline to back up the claim for damages.

If the co-owners can't agree on how to manage the property, perhaps it's time to talk about selling it and splitting the proceeds - or, as was previously suggested, suing for partition and sale (although that will be expensive). If they can now agree, they should enter into a formal written contract detailing their respective rights and responsibilities. I would suggest having a lawyer draft the contract.