Tenant terms lease 2months early and she's hoping to get a security deposit back

[Mary Strackman]

My tenant complained that the master bathroom tile is cracked around the shower and she thinks there could be mold. The bathroom was some what dated. I hired a contractor to remove all tile and re-place with new tile. The contractors hired were messy by failing to drape the bathroom off from the tenant's closet or bedroom and as a result, she had lots a dust. Tenant also got frustrated with the hired contractor because they told me the work would be finished in 3 days but it resulted to 11 days. I am willing to give to her a concession for the inconvenience for half of the month. She has made a decision to break the lease because she needs a 4br now that she's pregnant and she wants to be closer to her office. She knows she's forfeiting her last month's rent but she's expecting her security deposit.  Since she's leaving 2mths prior to her lease terming, would you return her security deposit?

[Nathan Gesner]

Quote from @Mary Strackman:

You agreed to give her half a month's rent. She agreed to give you a month of rent in exchange for leaving early. That was all agreed to and shouldn't be an issue.

The security deposit is supposed to be used for cleaning, repairs, and unpaid rent. You don't have any unpaid rent because you agreed to let her go early and forfeit the last month's rent. So you can only use the deposit for cleaning and repairs, then refund the remainder.

Start looking for a Tenant immediately. You'll likely find someone to move in shortly after she's out.