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Kindly ask for both the security and pet deposit back. They materially breached the contract (lease) with you, so everything is legally refundable.

If they do not give you your money back, then you can easily file a valid claim in small claims court or just threaten legal action. Since they canceled your lease before it began, they are unjustly enriched by keeping both of your deposits. Any lawyer will tell you that's a classic no-no in contracts law. Basically they are stealing from you.

If they still don't budge, definitely just file a claim. If your landlord says that you need to go to mediation because the lease specifies it, inform them that since they canceled the lease you are no longer bound by it, and thus not required to mediate your dispute.

Sorry you have to go through this trouble.