Legally creating one is definitely something to discuss with a securities attorney who specializes in funds.

I don't like the idea of leaving security deposits with them because they don't keep it in a separate account.

I currently have a tenant who gave me 30 day notice on 10/21 to move out on 11/31 and is refusing to pay the last months (11/1) rent but telling to take it out of the security deposit. 

There was an issue with the previous roommate tenants (dispute between themselves...also seemed like trouble in general which I hadn't foreseen during screening) so it was agreed they would move if a qualified tenant was secured. 

Looks like I’ll be good to secure a HELOC with them.

Hey everyone, could you please recommend the best way of marketing to secure my first private deal in Ontario. 

@Jack Knight Aloha , I usually offer to pay the security deposit on their new place and go from there

Your first step is to talk to a securities attorney to understand if my comment is correct, but generally, it sounds like you are doing all the work and your partners are passive.  

I know in most instances the landlord would keep the security deposit, but I have people telling me that they are contractually obligated to pay for the whole year.

Agreed with much of what's been said and would underscore the importance of securing your property (SimpliSafe is a great option) and having solid PM.