In addition to the above response, canceling a tenancy and matters involving security deposits are governed by strict rules.  These rules must be followed exactly, or the consequence is that certian rights will be lost.   For example the landlord is required to give written notice within a certain period of time, or landlord forfeits the right to impose a claim upon the secuirty deposit.  Unless the tenant objects to the imposition of the landlord's claim or the amount of the claim within a specified peroid after the receipt of the landlord's notice, the landlord may then claim the secuirty depost.

A security deposito is generally given to secure an apartment or to ensure a landlord that it has money to pay for damages to an apartment that you damage and fail to return in the same condition that you received it.  In this case, the landlord made a promise to you that the apartment would be in move in condition by a certain date.  Despite the landlord's promises and representations the landlord failed to comply and deliever the apartment for you to use as you intended to use it. Furthermore, the landlord could not rent it out to other people becausue it was not ready for a move in by anyone.  I suggest that you file a lawsuit against the landlord in small claims court as it is only fair that you get the deposit back- i.e. you did not breach the contract, the landlord did and he is unjustly enriched if he keeps the deposit.