It is clearly more geared toward GC's but that works for me as I am a hands on investor and tend to coordinate subs myself, rather than forfeit a 20% markup (at least) on all of my projects to someone else. 

It is protected and should be in a separate account as you owe the tenant that money back when they vacate if they live out their lease and return the unit to you in acceptable condition.If however, they do cause undue damage or break the lease then any forfeited deposits you can move over to your reserve account.

She knows she's forfeiting her last month's rent but she's expecting her security deposit. 

Failure to do this within 30 days, the landlord forfeits their right to make any deductions.If the renter doesn’t object to the deductions, then the landlord has 30 days after the initial written notice to return a portion of the deposit to the renter.However, if the tenant objects, then the landlord can move to a small claims court.https://www.managecentralfloridaproperty.com/florida-securit....That being said, as others have stated, I have zero clue a to why the owner is even involved.

@Shuwei Wang-  as you purchased it as is - you are likely  stuck with the repair costs ...if you ask the seller for a  credit - you can only use the  credit to cover your loan  fees/ closing costs ...you can ask the seller to  drop the price  but that  still  will require you pay for the  repairs ...be  aware that the  appraisal  may  call for repairs to be done before  closing can occur ...last   idea - consider  walking from deal  ( and  possibly  forfeiting the Earnest moeny deposit ) ...good luck

All that will happen if she moves is she forfeits her deposit.

depends on the laws of your state but normally they have breached the contract and violated the lease thus forfeiting their security deposit which is what the held for collateral.To be safe I would document with pictures and video to prove if any damage has been done to the property.

Reality is she can pick up and move and forfeit her deposit and that is all of the money you will ever see.

Not sure how much your escrow money is, but you might be better off forfeiting it if you're too far into the contract.

Or apartment is forfeited to the next applicant.