I found a tenant who signed the lease and paid security deposit.

I also certified mailed the Move Out Condition Report and partial security deposit on the 21st day after vacating.

There are many alternatives you can use, I would urge you to check your local laws but I know here in Cleveland, OH we can charge an increased deposit or we can also require a guarantor (who can have different credit req. then someone living in the unit) It's important that no matter what you do you do it for everyone going forward, making exceptions for screening for some but not all can become a Fair Housing issue. 

I told them I would comply with all of this but they would lose their deposit and the tenant who is staying would need to replenish the initial deposit account.

I use a credit range for deposits.

After a tenant has been evicted in Washington County, MD, and there is still an outstanding balance even after applying the tenant’s security deposit, are my only options for collection limited to small claims court and utilizing a collection agency?

For example, I often see Buyers purchase property thinking there is a $1,000 deposit but then the tenant claims it was $2,000 because they paid the last month's rent.

So, for a cash sale of $27,500 you might give an earnest money deposit of $1000 making that 5% fee $50. 

Plus, they wouldn’t be able to charge extra rent or additional security deposits specifically for pets.Just a heads-up – these new rules wouldn’t apply to rental agreements signed before January 1, 2025.Where Are We in the Legislative Process?

Deposit Insurance Concerns: In many countries, bank deposits are insured up to a certain limit by governmental agencies.