We signed a lease, filled out an application, and gave the landlord a security deposit for a home on JULY 17th. The landlord never gave us a copy of the lease (and I believe in NH renters do not have a signed copy of the lease within 30 days the contract/lease is void) THe landlord took until July 31st to approve application. We could only view the home on Sundays between 11:30am and noon as landlord had rented the property for weekly vacation rentals. We received an email from landlord on Aug 9 saying we could view could view the property on the 13 the next Sunday, and also landlord said that she "had other people interested, so if we didn't want the property just let her know" We viewed the home on Sunday, realized no improvements had been made as promised, and on the 17th emailed the landlord informing her of our decision not to rent the property. She was irate, demanded that we pay her two months of rent on Sep 1st (the day the lease was to begin) and wrote that we would not get the deposit back. After cooling down for several weeks, I spoke with her after Sep 1st and she had rented the property for Sep15th she only agreed to give us half of the scurity deposit back since we "cost her a half months rent" Should I take this matter to small claims court I have all the emails, and I believe I am entitled to my full deposit back (I have the receipt) or should I take half the amount, which way will the judge rule?

If I were you I would definitely file a lawsuit in small claims court. You never received a fully signed copy of the lease so the landlord can't claim that there was a valid lease. The landlord told you in writing that she had other people who were interested in the property if you didn't want it, which is a very strong implication that you had the right to back out without penalty. (Print out that email and bring it to court with you.) It sounds like you have a pretty good case.

The worst that can happen is that the judge will rule in favor of the landlord and grant her the 1/2 month of rent. So I would say that it's definitely worth filing the lawsuit.