There can always be a situation specific to you where your intent was to hold but something cause you to change that. 

What problems with the other tenants (who they likely know well) could they cause?

I heard but don't know the veracity of this claim, However FLA suffers from a lot of fraudulent claims there by also causing rates to be higher.. 

Federal Cares act alone is causing over 5 billion in damages for it's moratoriums imposed on landlords.

If you tell them their credit score is too low (or some other reason) and somehow you obtained information that is inaccurate, then there is the potential to cause a legal problem. 

Can anyone recommend good companies to root cause  and implement solution to fix this issue?

😳This is caused by a combination of buyers not being able to afford to buy with interest rates back up above 7%, and seller’s not wanting to budge on their sale price...a standoff.My guess is 2025 will likely be just like 2024 and 2023 if rates stay above 6%....

Here is  the biggest question - I expect withholding  $1.00 of the security deposit is going to cause friction.

Another common problem is poor due diligence—jumping into deals without verifying the borrower or collateral often leads to future regrets.I’ve also seen over-leveraged borrowers cause trouble, prioritizing other creditors over private lenders.

It will cause you to lose money every single time.