I'm not a lawyer, and I'm not in your state, so take this with a grain of salt but-If "accepted an offer" means that you signed a legally binding contract that doesn't provide you with an out, then the short answer is no, you cannot legally cancel the sale. 

After some discussion in which I advised security deposit was held on behalf of both parties, he withdrew request until end of lease in September.I have advised girlfriend of his call, and she then stated that the security deposit monies really belongs to her.My dilemma is that the lease is coming to an end, and I understand that in PA, a landlord is required to return 1 month security deposit if lease is to be extended.The place has not been vandalised and is basically being taken care of, and I'm willing to renew lease with the girlfriend, who very interested in renewing lease, but who also now appears to have allowed a new boyfriend to move in.I suppose I could have this situation handled by hiring a lawyer, but my challenge is how should I go about retaining at least 1 month security deposit while returning the other. 

Get active in the community, join groups focused on investing, and seek advice from lawyers and financial experts.

Additionally, if you have any referrals to good eviction lawyers who can take my case, I would be very grateful.Thank you so much for your help.

Some big ones that you guys can talk about before getting lawyers/CPAs involved to see if you are in agreement are things like identifying key decision rights and determine who has those if there is a disagreement (leasing decisions, refinancing, sale, choosing a property manager, scope of capex and renovations, etc) and determining profit/distribution splits.

Could you possibly hire a lawyer to make sure all paperwork is in order and sell it yourself.

I'm sure there are several factors to discuss with a lawyer. 

After you pay a lawyer to fight the lawyer they get for free as the poor disadvantaged renter.  

If it was me I would give them the 1000 and have your lawyer write a release of all claims as to the water.. and probably not renew unless other wise they are great tenants.. but if your already asking for pre signed checks sounds like collections maybe an issue as well.

i am planning on talking to real estate lawyer and real estate cpa but wanted to see if there were any thoughts from the forum. thanks!