You notify them you will be purchasing the policy for them and doing so with their security deposit money, if state law allows it. 

I live in Tacoma, WA…a lot of folks don’t want to deal with having to learn the local housing laws.

Stick to the lease agreement and landlord-tenant laws—most headaches come from trying to make exceptions.

Because it's required by law

Tax law requires it.

The PM should be an expert on state law, and they should have policies and procedures in place to handle these situations.

I am searching through all the BP threads trying to find the best fit for me in terms of asset protection/law/CPA firm that specialize in real estate investment and have narrowed it down to Anderson or KKOS/Mark Kohler.

New Jersey state law allows for owner occupants to have much more freedom. 

But I don't think I fully understand the law surrounding this and the actual ways it should be used.As I understand it, this is what you could do with such a clause if you are buying a property and the seller is financing it to you:As an example using easy numbers, you could buy a property through seller financing for a price of $100,000.

Lastly, there's very landlord friendly laws here!