What can a landlord do under these circumstances?

A judge may deem that 5% is sufficient under the circumstances, the value of the property, term of the option, market rents or income from the property play a role in the overall picture.Consider too that a contract only takes the parties to a settlement of agreements, if both parties agree all the way to settlement, there is no problem paying insufficient consideration as acceptance is made by closing the deal.

For example, A tenant could neglect to tell me about a leak that ends up costing more money to repair water damage.

Some or all of these legitimate conditions might be described as circumstances that must occur, or events that must take place, before the owner / seller will grant an option to purchase the property.

Vandalism charges may be prosecuted as either misdemeanors or felonies based on the surrounding circumstances.

I have a tendency to read into questions about age and circumstances.

I will of course share with my brothers and sisters, bring your own paper cups. . .I neglected to also ping the Hipster Ali Boone!

Can I still use the security deposit for the unpaid rent even under the circumstances that they are filing a bankruptcy?

Landlords aren't usually purposefully mean and neglectful - just usually overworked and everything get's prioritized.

Over time the circumstances will change for absentee owners.