Please Break up the sentence.

Reserving the property requires a $500 security deposit , which will be refunded unless there is damage to the property or evidence that there has been smoking in the cottage or a pet on the premises or if the reservation is canceled within one month prior to the rental period.

I'd divide it like this. You can do the rephrasing and put in the correct punctuation. Hint: I'd use a colon after the first rephrased clause in the second part and then commas or semicolons to separate the parts of the series.

Reserving the property requires a $500 security deposit ,

which will be refunded unless there is damage to the property or evidence that there has been smoking in the cottage or a pet on the premises or if the reservation is canceled within one month prior to the rental period.

1. Reserving the property requires a $500 security deposit.

2. The security deposit will be refunded unless:
a. there is damage to the property,
b. there is evidence of smoking in the cottage,
c. there is evidence of a pet on the premises,
d. the reservation is canceled within one month prior to the rental period.

To break up the sentence, you can divide it into smaller parts:

"Reserving the property requires a $500 security deposit."

This part of the sentence states that in order to reserve the property, a $500 security deposit is necessary.

"The security deposit will be refunded unless..."

In this segment, it explains that the security deposit will be returned under certain conditions.

"...there is damage to the property..."

If there is any damage to the property, the security deposit may not be refunded.

"...or evidence that there has been smoking in the cottage..."

If there is any evidence of smoking inside the cottage, the security deposit may not be refunded.

"...or a pet on the premises..."

If there is any indication that a pet has been on the property, the security deposit may not be refunded.

"...or if the reservation is canceled within one month prior to the rental period."

Lastly, if the reservation is canceled less than one month before the rental period, the security deposit may not be refunded.