OSB On Interior Walls

Interior Surfaces
Hello, I've got a quick question, hoping you may have some contacts or resourses to share with me.
I just bought a house.  I had my realtor, and the realtor that was selling the house also was the owner.  The other realtor/owner was a pain all the way through the process but we got it done.  Now after being there not even a month I found out that the realtor/owner had some remodel work done on the home.  All four walls in the living room and the kitchen are not sheet rock, she had OSB waffer board(roof decking)  put on the walls and sheet rock mud over the entire wall then paint.  So now the sheet rock mud and paint are falling off of the walls.  The realtor/owner is not very cooperative and offered five hundred dollars to fix the problem (since she'd have to pay at least that much if i were to take her to small claims court), which would be enough to maybe cover the materials. 
What can I do or who can I contact about this?  Thank y