A psychotic motel owner lets up (6)
I believe the answer is:
abates
'lets up' is the definition.
('abate' can be a synonym of 'let up')
'a psychotic motel owner' is the wordplay.
I cannot really understand how this works, but
'a' is within the answer.
'motel owner' could be 'bates' (I've seen this before) and 'bates' is located in the answer.
No letters remain.
This may be the basis of the clue (or it may be nonsense).
(Other definitions for abates that I've seen before include "moderates" , "has a fall" , "Becomes less severe or strong" , "Slacks off" , "Makes less intense" .)