Do they have pet deposits or pay pet rent?

In addition - checking account statements showing deposit income going back X number of months would also do that as well.  

Did you refund the whole security deposit or were there repairs?

Deposit for another place + $ to actually pack up and move his stuff.

We offer early termination for basically all leases, which is 1 month plus the deposit if there's no damages. 

It also states that any security deposit refunds owed will be made payable to all parties on the lease agreement.One tenant has stopped contacting the roommates and us, and we are not sure they are planning to return.

1) Do you put the extra rent and deposit in escrow?

It sounds like he's talking about backing out via contingencies on the contract like inspection or financing contingencies, where you can back out of the contract and get your earnest deposit back.

Furthermore, what are the regulations regarding security deposit?

Around here a lot of landlords offer section 8 tenants $300 cash when they move in with $0 security deposit.