Is it permissible for the landlord to take a full year's rent in advance in exchange for a percentage discount, or to take a security deposit from which arrears and expenses are deducted, and is it permissible for him to dispose of the security deposit?

There is no objection to stipulating the payment of one year's apartment rent in advance if both parties agree, as the contract is valid and the general rule concerning conditions is permissibility. There is also no objection to requiring the tenant to pay a sum of money as a security deposit to guarantee the landlord's rights should the tenant fail to pay his dues; this sum is returned to the tenant at the end of the term. The landlord does not have the right to dispose of the security deposit without the tenant's permission.