The sale is made pursuant to Chapter 5, Title 54 of the Revised Statutes of the State of New Jersey, as amended, industrial Properties may be subject to the Spill Compensation and Control Act (N.J.S.A. 58:12-23.11 et seq), the Water Pollution Control Act (N.J.S.A. 58:10A-1 et seq) and the Industrial Site Recover Act (N.J.S.A. 13:1K-6 et seq).

As far as HOW could someone be prosecuted: it is there in the state statutes.

He would have to talk to the 3 remaining tenants about getting his deposit from them, and when they move out they talk to you about getting their deposit back.If he did pay a deposit directly to you, what you do with the deposit 1st depends on how the state statutes say you can handle security deposits, then it depends on how the lease says to handle security deposits, then it depends on how you want to treat the security deposit.I recommend you take advantage of this learning experience to list any and all items you did not take into account before renting to room-mates - then make sure all of your documents and procedures (and the state laws) allow you to operate how you want to operate....Generally speaking, a tenant who breaks a lease early by moving out (let's assume proper notice was given and assume there are no damages to the unit) is liable to the landlord for the income the landlord loses by virtue of the tenant moving out early.

*As long as you provide owner financing on the sale of your property no more than one time every three years, you will not be in violation of the statute.

@Forrest Holden, Anything having to do with the Service and interpretation of statutes is the deep end for sure.  

Besides, where the purchase is made in violation of an existing statute and in evasion of its express provision, no trust can result in favor of the party who is guilty of the fraud. [13] To hold otherwise would allow circumvention of the constitutional prohibition.

The FL statutes were actually amended to address this. 

Mortgage foreclosures is a nuanced and esoteric strategy and one should be familiar with all applicable statutes (local and Federal) depending on the jurisdiction.

Illinois foreclosure law requires proceedings under those statutes if buyer has at least a 20% ownership of the property.

Then make sure you are not breaching one of the SEC fund raising statutes.