Many of us include a strict no-smoking policy in our written rental agreements, stating no smoking in or around the vacation rental home. However, we have heard of some rare cases where owners have still had problems with "rotten egg" renters.  Whether you found cigarette butts and packages in and around your home or your home was left smelling like tar and nicotine, you will likely be pretty upset that someone violated your rules and harmed the non-smoking environment you've tried to enforce.

Your first step in preventing this from occurring again in the future is to post the rules in your contract, your directions and inside your home or condo, along with the penalties for violating.  You can also place signs within your home to remind your renters of the penalties for violating this rule if any evidence of smoking is found.  For example, the Marriott places signs in their rooms touting the smoke-free zone and reminding guests of a $300 fee for smoking in their rooms.

On the other hand, it's probably a bit extreme (and difficult to police) to not allow people to smoke outside your home.  If you truly wish to stop people from smoking outside, though, you must be sure to tell them in all forms of your communications including via the phone.

As far as keeping any portion of the damage/security deposit, you can only keep the amount that it costs you to clean the property. So, if it costs $200 to steam clean the carpets and upholstery and $100 for your housekeeper's time, you can only keep $300 of your renters' security deposit.

Because the rules for security deposits in most states have very strict guidelines, you might consider imposing a fine instead.  To help prevent future occurrences, you can stipulate in your rental agreement that a $200 fine (or whatever amount you deem reasonable) will be charged to the renters if there is any evidence of smoking inside or outside of the property.