The Original owner , just deposited the $500 into their Bank, and I guess claimed it as Income.My questions then are...1.

You will want to check local law, but in my jurisdiction an UNLICENSED person CAN do the following:  Delivering a lease application, a lease, or any amendment thereof to any person;Receiving a lease application, lease, or amendment thereof, a security deposit, rental payment, or any related payment for delivery to and made payable to the real estate firm or owner;Showing a rental unit to any person, or executing leases or rental agreements, and the employee or retainee is acting under the direct instruction of the owner or designated or managing brokerProviding information about a rental unit, a lease, an application for lease, or a security deposit and rental amounts to any prospective tenant; orAssisting in the performance of property management functions by carrying out administrative, clerical, financial, or maintenance tasks.The key is in how the money is handled. 

John,Both parties have to be in agreement and should sign a legal well drafted document releasing the other, stipulating terms of the security deposit reimbursement.

or can you make a deposit and pay at a later date? 

I know many others charge a non-refundable pet deposit.

She deposited only 1/2 the rent.Nov 6: I served 3-day notice to pay or quit for remainder of rent.  

More than anything I was concerned of giving someone $1000 in cash as initial deposit (50%) and he run away with that as I am using him for the first time.

I have an auction calendar on my website where i keep track of the hyper local auctions occuring, date/times and deposit amounts.

And if they have a pet, meet it first to to make sure its well behaved and friendly - I don't want a mean dog peeing all over but it seems like if you can find a responsible pet owner, an extra $50 dollar a month pet fee along with a pet deposit would help expand my tenant option and cash flow!

I have done many sandwich lease option deals where I collect non refundable tenant buyer deposits for lease to own deals.