What is the name of your state (only U.S. law)? I use to live in Maryland and had a home in rented. I have sold the home and moved, but my last Tennent is threatening a suit for funds I've held for damage. Can I still be sued as a non resident with no property in the state?
Yes. As Latigo points out, you can be sued in Maryland and you would have to travel to defend yourself or risk a default judgment that can be domesticated and enforced in your state.
Make sure you handled the security deposit exactly in accordance with the Maryland landlord tenant statute. The security deposit section is 8-203 at:
http://laws.uslandlord.com/laws/mdstatelaw.html
If you handled it properly you shouldn't have a problem.
If you didn't handle it properly, you would be wise to negotiate some sort of compromise with the tenant.
If you would care to itemize your holdback and the reasons, we could tell you if you have a problem.
If the rental was in Baltimore there may be additional requirements:
http://www.peoples-law.org/special-laws-rules-baltimore-city