What you describe (seems to me) to be a combination of culture clash and disrespect/thievery. The BIG thing to get understood (again according to my own experience) is that the Security/rent deposit in a Latin American Country is not seen in the same way as it is in the United States. OK, now I have to explain how it is seen in Latin America and I will probably screw it up but one thing for sure is; Always use that deposit as your last month's rent!! Period no explanations no 'but what if's'... that's the ONLY way to do it and not feel ripped off... I have only very rarely seen these deposits returned in fact I don't remember ever seeing one returned..what does this mean?? well, you could interpret it as 'all Hispanics are thieves' or you can do it their way and as I suggest, use it as your last months rent...just give notice and nothing more. Now in this case, it seems that insult was added to injury. ..look if you are a gringo in any Latin country you are going to get 'ripped off' on any money transaction if it is at all possible...it is like it was a bonus to the person on the other side of the business for having attracted you into the transaction... there's no right and wrong to this stuff it's just 'when in Rome...' ... OK now, everyone can throw bricks at me for writing this but I only am sharing my own experience and confused understanding of this topic. I live in Mexico...only Gringos think that they are going to get their deposit back as they are leaving..... they don't...one way or another ...they don't.
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