I don't think it is possible to reverse the damage, but you could make the soil the tree is growing in more healthy and the tree more happy by removing the tarp and colored mulch.

agree on landscape cloth.. get rid of it ...

and though i would also be happy if you got rid of RED!!! mulch ... thats not really relevant .. rake it off.. get rid of man made fabric.. and put it back if you wish ..

anything that is growing shroom is dead.. or soon to be ... properly remove it.. as low as you can go ... a good pruning saw would be helpful ...

after the dead stuff is removed.. you might be able to do additional pruning to reshape it ..

but lets be honest.. brutally.. since this is all on the prior owner ...

this HUGE!!!! tree was planted about 15 feet too close to the house ... it should probably be removed .. sooner or later ...

it could probably also be rejuvenated down to a much smaller size.. but that would be a multi year pruning project.. and with no insult to the massive root mass ... it will be back over the gutters in a year or two ...

in my experience.. this is something.. back in the day ... where i would spend 5 years fooling around with it.. learning all kinds of things about renovation and pruning.. etc ... and the happiest day of my life.. would be the day i finally got rid of it.. and replaced it with something more suited to the size of the spot ..

and then i would spend the next few years wondering why i wasted 5 years messing with it.. because the new plants look so great ...

it sure is easy.. when we dont have to beat around the bush because someone posting made a mistake ... pun intended ...

and note.. that it is leaning away from the house.. lilac is a full sun plant .. and that it is leaning.. indicates that it is stretching for light.. or badly pruned to keep it off the house ... but if you replant a new lilac.. the site might be too shady for it to thrive ... we would need to discuss such if and when you are looking for a new plant ... in a new post ... [when it was planted 20 years ago or so.. it was probably in much more sun ...]

ken

ps: also note.. if you prune it.. it will probably sprout like a maniac from the ground.. reverting to the shrub it is .... and that wont be good ... unless you dont care about losing that walkway ....

@windberry - thank you for the info. The tarp is a headache that I recently discovered while removing some bushes. Thanks!

@ken_adrian - thank you so very much for being honest. The red is my wife’s choice so I’m uh … stuck with that. Doh!

When we first moved into the house (a few years ago) I had an arborist out and had a lot of pruning done. Trees were rubbing the old cedar shingles (recently replaced with architectural asphalt) and I just didn’t think that was a good thing (I was honestly quite ignorant about house/yard stuff and I’m learning a lot now. I’m very thankful for your honest (even if it’s brutal) input/feedback. There are 4 of these trees (including the one in the pic) around my house and I do enjoy them. I’ve learned how to spot dying red maples and I just learned (thanks to you) that anything with mushrooms is about to kick the bucket.

Although I really … really… don’t want to get rid of this tree, cutting it down is probably the best course of action. It’s about 20 ft tall so I’m not looking forward to cutting it down.

Although I’m saddened about the state of this tree, I truly appreciate the honest feedback! There’s a lot about the previous owners that I’m discovering and it’s mostly negative.

Thanks again for the education … and the pun … ha!

Ken

It could be easy to check how the roots behave close to the foundation, just to have peace of mind. I don't think they are doing any damage, but i may be wrong. Also, are you sure that there are mushrooms growing on the trunk, not lichens?

I am surprised it isn't sending up a lot of suckers from the roots with the trunks in such bad shape. My lilac wasn't as large but I cut the large trunks out over a couple of years to renew it.

https://www.almanac.com/plant/lilacs

@windberry - the picture may be a bit deceiving. The tree is about 10 feet from the house. Not sure if that’s too close or not. Also they are mushrooms. There’s lichens on there too. We just got a bunch of rain and I was able to peel off a few mushrooms. Ugh.