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Hello there --
They may simply give it back to you if you ask. If not, they can hold it as your security deposit and then they have 20 days to return it to you after you move from the property so long as you leave them a forwarding address. Regarding the manner in which the notice was delivered to you, that is a legally acceptable method according to the law and courts to give a notice to a tenant to quit the premises. It is called "POSTING" the notice at the property and it may not be used very much anymore but it is legal.
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Hello again --
If you are unable to leave at the end of the 60 days and she refuses to negotiate a reasonable extension then her recourse is to turn to the court and file paperwork to evict you from the property. That process will take more than a month to happen (It will take her about 3 weeks to get a court date and then you can go to the hearing and argue for a few additional weeks time in order to get everything out and when the judge learns that the LL also has an additional month rent on deposit for you, the judge will most likely give you that additional time without any issues). Then, if you do not move out of the place by the court ordered date, she must call the local Sheriff to actually evict you from the home (she cannot change locks or try to move you out herself).