Security Deposit as Last Month's Rent?

[Matt Lorenzo]

First, thanks for stopping and helping me with this. Long story short; I am renting a 1bed, 1bath condo to a couple. They are up for lease renewal on August 15th. I offered them the same rate as they have now and said they needed to provide 30 days notice to me whether they want to renew. The woman (who's name is on the lease) just notified me that she is leaving but the male wants to stay and sign for 1 more year. She is asking if we can do an early evaluation and inspection of the unit before she moves out and if everything looks fine she is asking to us the security deposit (equal to 1 month's rent) as her last months rent. 

Has anyone done this before? Any thoughts? Thanks in advance