People wo rent out less than 5 units are not bound by that law.
If the guy wants to play hard ball, he can sue him for the month rent he didn't pay as he didn't give notice, reached an agreement but just left. Wonder what he did to the (card) key. On top of that the damages found which exceed the 2 months deposit.
OP states he saw damages but didn't report it to the guy so it could be fixed while still there. Feel like there is some missing parts in his story.