If there's no realistic prospect of success (i.e. you still won't get your money) then all you're doing is trying to make yourself feel better by punishing them which seldom works.

That's to punish wrong doers.

To a certain extent, it's true, there are plenty of people in government, mostly at the city level, who are there to be punish evil business owners, but we can be diligent and not hand them their ammunition. 

Because if this is an hour's drive away, or even worse, a few states away, you're in an untenable situation if you're not working with a local property manager.Let's assume the best case scenario, this is a local issue and you can get down to this building fairly easily.The next thing that comes to mind reading all the questions you're asking here is that they are all really the same thing: Am I allowed to punish my tenants in this way? 

You're probably not intending to be fraudulent, however as the Community Manager here, I feel compelled to inform you that lying on a mortgage application, stating that you intend to use the property in one way when you actually intend to use it in an altogether different way, is mortgage fraud which is a felony punishable by up to $1 million in fines and significant prison time.We recently released an episode of the BiggerPockets Money Podcast with @Jon Lallande, where he gave mortgage tips and we touched on mortgage fraud near the end.

In some places tenants are due some multiple of the deposit to punish bad landlords who hold them for frivolous reasons so something to look into for you.  

If they did indeed fail to respond to orders transferring money out, then part of that punishment will also come from a flurry of lawsuits. 

It is when we try to mess with the “invisible hand” of the economy that we get punished and the economy suffers.

If anything bad comes out of it, authorities will find ways to punish the owners.The examples I cited about shoveling snow, or someone mentioned about "robbing them" are not that common.

However, although the punishments can be silly, the actual rules to follow in the RTLO aren't that difficult.