Is it ok for an apartment I applied at to keep my deposit after I've been denied?

I applied at an apartment last week and had put a little to much on the money order ($40) so they said they'd just add it to my deposit if i were to get approved. I also paid an admin fee of $100. At the time we applied we were living at some apartments and having some issues so we decided to go ahead and move but first we were going to make sure we were goingto be bale to get into these apartments. We ended up being denied because we owe the apartment we were lving at money and they were refusing to make a payment plan with us. So I understand that I can not get my Admin fee back or Application fee back but the other apartments that we applied at our saying we can not get the $40 that went towards our deposit if we were to get approved. When I asked why she said because we owed the apartments we were lving at. They have no conection though (no shared management, coorporation, anything). So I just wanted to see if this is legal or if this apartment is trying to pull a fast one on us. They were originally going to give it back (by they i mean the istant manager, leasing manager, and other leasing agents) until I asked the main manager and she was the one who said no. Is this ok?