I can't give you legal advise, but I can tell you that the situation you are in is happening to many an unsuspecting tenant. I would cantact the Department of Housing (HUD) and ask them about how to obtain free legal advise in this situation. You can find them in the phone book in the U.S. Government pages under "housing." You may also want to contact the District Attorney's office. They have created a foreclosure fraud division that may have some helpful information for tenants as well. You can find the DA in the County Government Pages of the phone book. With all that is going on in today's market place, I am encouraging anyone with any kind of housing need to work with a reputable real estate agent, even if it is for finding a home to rent. A good agent can research the status of the title on the property to make sure there are no notices of default (the first step in foreclosure). I wish the best for you, and I hope you are able to find the help you need.
If you have not yet left the house be sure you document (with pictures and/or video) that you left the house in good condition and it warranted your monies back.
Do it right, and I'm not an attorney, but you'll at least need to put your demand in writing to him. And if he doesn't within the time specified by law, go to small claims court. There is free help a the court too on how to file an action and how to serve notice, etc.
Yes take him to small claims court. Document any attempts to contact him and his response. Collecting the money might be diffecult but the judgment is good for many years.
Michael Doyle Realtor