After I confirm its rented I give my 30 day notice ending his services later that evening.9 days later I get a text from him saying that their 1st months rent and deposit have bounced.

He would be eligible to use his security deposit towards it.

If I were him, I wouldn't return your escrow deposit either, since you entered into the contract with no ability to execute it. 

The tenant moved out and is now demanding a return of her security deposit.

The rule also provides that the unlicensed individual performing the permitted activities listed in this rule must work under the supervision of a broker and his/her compensation must be primarily on a salaried or hourly basis.Under this rule, the duties an unlicensed employee can perform when working with residential rental property are the following: maintenanceclerical or administrative supportcollect or accept rents and/or security deposits which are made payable to the owner or real estate brokerageexhibit or show residential rental units to prospective tenantsfurnish published information regarding the propertysupply applications and leasesreceive applications and leases for submission to the owner or broker for approvalThe rule provides that an unlicensed employee may not perform the following duties: negotiate contracts or leasesdeviate from the rental price and/or other terms and conditions previously established by the owner or broker when providing information to prospective tenantsapprove rental applications or leasessettle or arrange the terms and conditions of a lease on behalf of the owner or brokeroffer inducements to prospective tenants unless they are previously advertised or arranged with the owner or brokerinterpret or provide their opinion concerning the terms or conditions of a leaseindicate to the public that he is in a position of authority which has the ultimate managerial responsibility of the rental propertyIt’s clear that a brokerage employee can perform many clerical and administrative functions without holding a real estate license.

She moved out before her lease was over, and there were no remaining deposit funds available to return to her after cleaning, vacancy, re-leasing, etc.

If you don't want to use a property management company (although there are some property management companies that will help you find a tenant for a fee but not manage them, something to look at if you struggle to find a tenant, they will do all their screening and showing of the property, have the tenant sign the lease and collect the first rent and security deposit, then transfer the tenant to you), then find an application online for prospective people to fill out, make sure they have verifiable income, there are companies online that you can do background checks and credit checks.  

Also tell them they need first, last and security deposit.

If he changes looks you need to get a copy and you can charge for the change back to his sec deposit when he moves out.

The deposits are several hundred below the rent.