The standard deposit is approx 9 months rent, there are generally a lot of issues is getting it back. But it depends on the owner as well.
Your deposit was quite high to begin with.
Was in this situation only once, but on the loosing side of the situation where I settled as per the ownerβs wishes as I did not want to continue the fight or go the legal way.
Check if you are okay with the settlement he is proposing, and ask him to cut from your deposit and give the rest of the money back. If possible, get the last months rent also reduced from the deposit which reduces your exposure.
If you fight this, he can easily hold the deposit money and you will have to go through the legal route which will again take time and resources.