I don't know what state you live in, but most states have a provision that a tenant may withhold rent for a landlord's denial of basic necessities, i.e., water, heat, plumbing, etc. Your landlord may try to sue you because he's told you you have to repair the problems, but between what is stated in your lease and any state laws, he would most likely lose. The unfortunate thing is that, if he did sue, you would be forced to spend money to defend yourself, and even if you did win, collecting any money awarded to you is another impossible effort in itself. In addition, as unfortunate as it is, even though his reason for not returning your deposit is legally unacceptable, you would have to sue him in order to get it back and that's just going to cost more money than the deposit you're trying to get back. Unlike attorneys, a landlord has no obligation to keep a separate account for tenant monies. He can spend the rent money he receives in any way he wishes, but he does have an obligation to make repairs when repairs need to be made. He can refuse to pay for the repairs if he can prove that you were the cause of the damage. There are legal services out there that deal specifically and only with landlord/tenant issues. They will work for you, free of charge or on a sliding scale, to help resolve this matter. Bottom line from a legal standpoint, there isn't enough money that is in controversy here to warrant legal measures. Your already doing the smartest thing, which is just getting out of there.