If I were you I would contact a lawer to find out your rights under the fair housing act. There are specific and very strict rules on how a landlord may keep your security deposit and why they are keeping it is stricltly regulated. Too many court cases have been found in favor of the tenant in recent years to let it slide.
Seeking the advice of a good legal professional would be a wise move.

Did you sign the lease? If so, yes he may keep your security deposit and may hold you to paying the rent until another tenant is found.Have you spoken to landlord and told him/her the reason you do not want to move into the condo?