You are giving very charitable interpretation to someone who was clearly withholding the full security deposit for two months past the due in flagrant violation of the law and common sense. He didn't even fully comply with the law when it was shown to him. At two months past due, he would have been required to pay double for late payment, and the OP was generous in not enforcing the law to its full extent. Given the asymmetry between the number of instances where a renter and a landlord will need to engage in this transaction, it is hard to extend the same leeway to someone who does this transaction for multiple units that we might afford someone doing this for one unit. If anything I would suspect that the landlord in question is a repeat offender.