Security deposit question

[Matt K.]

Hello.

Thanks for all the great advice and time you all give to help us newbies.

I've got my first duplex under contract at the moment. It's coming with one tenant in place. He is currently on month to month lease. 

When asking my realtor about getting the security deposit in with the contract for the house, I'm told that the former landlord is using it to replace the carpet. Which was needed. Carpet is already ordered and at the flooring place. First of all had I known this I would have liked to have worked a compromise to put something in other than carpet but it is what it is.How do I now proceed? I can't imagine that the tenant is going to be jumping up and down to fork over another deposit if I can even ask for one. Can I start over with a new lease legally? I hate to make him leave before getting the other side rent ready because of the no income period. Any advice from someone familiar with Kansas's laws?

Thanks again!