Inheret tenant security deposit question

[Enrique H.]

So I brought this sfh with tenants already in place. Tenants are living after 3 months ( they are in month to month agreement) 

I am doing the final walk through and they tell me that all the small holes in the walls were already there when they took position of the property. They say they needed the place to stay so they took it as it was.

Now they want their security deposit back in full. ( I did get the security deposit from the seller)

Should they get their deposit back in full even if it was their fault for accepting the house the way it was?  that will mean I will be stuck with repairs?

Or should I treat like any other of my rentals where I deduct any hole patching from their deposit?

I am not deducting anything for repainting or carpet cleaning as they lived there for 3 years.

Please advise as this is my first time going through this.