I call BS on that, because he wrote them a clear letter showing intent to vacate.Now I know it's not my problem, as the applicant signed his lease and sent me the security deposit.....However, I'd like to do him better and help him exercise his rights......Anybody know how to go about enforcing this??

As ironic as it sounds, if your lease did not specify this topic, you may be at legal liability for unnecessarily withholding the tenants deposit if he satisfied the terms of the lease (if there was one)...

I have already paid the senior mortgage liens and put down my earnest money deposit.

Still others know their rights but don't fight a landlord when a deposit is wrongly kept because they don't want to deal with the trouble.

Do Not offer anything as a "deposit," "down payment," or "credit," prior to opening escrow.

You would stand to lose the deposit if you backed out, so either way she is covered.

We also want to get copies of any leases of tenants, proof they have been paying, any Certificate of Occupancies, and also proof there is a security deposit. 

Of course I will explain that the security deposits and all obligations under the existing lease contract will be transferred to the LLC.  

I am afraid to allow yet another person in the house who is going to cause damage, which I will just have to eat because they aren't paying any security deposit.

You might get help from the owner to finance your down deposit amount.