What is the religious ruling when the security deposit is not returned to the tenant if the agreed-upon contract was terminated a year in advance, and it was agreed that the amount would not be returned in this case?

Firstly: The "security deposit" paid by the tenant to the landlord is legally categorized as a "pledge" (rahn). It is not permissible for the landlord to dispose of it; rather, he must keep it as a trust (amanah). If custom dictates that the lessor may dispose of this amount and then return its equivalent, it transforms into a "loan," and the transaction becomes prohibited because the Prophet (peace be upon him) forbade combining a loan and a sale, and leasing is akin to selling usufructs.

To avoid this prohibition, both parties must repent. The landlord must return the amount, or they can agree to convert it into a pledge that is not to be used, or they can make it part of the rent, or rent for the final months. If the tenant is forced to pay the security deposit due to the absence of an alternative, there is no sin upon him; the sin falls upon the lessor who transgresses.

Secondly: Leasing is a binding contract for both parties, and it is not permissible to terminate it except with the consent of the other party. The tenant is obligated to pay the rent until the end of the agreed-upon period, even if he ceases to utilize the property. If the tenant does not complete the term, the lessor has the right to collect the rent for the remaining period from the pledge. However, he is not permitted to seize the entire security deposit amount if it exceeds the due rent, based on the hadith "The pledge shall not be forfeited." He must return the excess.