If the gasket has failed, this would not be the tenant's fault.

If they fail to leave, start the eviction process right away. 

But you already know that if he gets laid off, he will quit paying and he will continue to live in the home for free as long as he can.It's not a guarantee he will fail but there's an increased level of risk.

As for trying to raise the rent, sounds like you tried and failed. 

You've opened yourself up to liability by not having a signed document / agreement with regard to the $1,500.The potential tenant is claiming that she did not sign anything agreeing to allow you to keep the "deposit" if she failed to move in.

All of these have to be balanced out because there are great tenants that give priority to paying for the roof over their head, that might fail in one of these qualifiers.

(Good is the cancer of Great) Fail, fall, crash and burn your way to the top.

They failed to meet their financial obligations and filed for bankruptcy.

But, for every one you know of, there are a million that have failed that you never heard of.

If they fail to follow through with renting the property, they forfeit the Holding Deposit and I put it back on the market.