I bet I get villified for this response, but here it is. I would use the last month's rent and the SD to cover the April and May rent for the deceased tenants, collect the April rent from the living tenant and use the last month's rent to cover May (I assume school ends in May). I would return the living student's SD as usual, less repairs. This is fair to the LL and doesn't unduly burden the deceaseds' parents with dealing with this financial situation. I doubt they have any expectation of a refund. Try to remember that you are these kids' LL, not their family friend. I'm not advocating being callous, but don't interject yourself where it's not appropriate. The family will likely have plenty of close support which will be much more meaningful to them.