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Security deposit withholding due to Section8

My mother and I recently moved out of our apartment because the landlord asked for it to give it to her son. After moving out turns out her son isn't moving in anymore. When asked for the security deposit refund, the landlord refused to give it back and said she would only return half of it because Section 8 did not pay her the rent increase. Is she allowed to this even though we are not responsible for Section 8's payments and if the apartment was left in better conditions that when we moved in?
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