Has my landlord breached our lease?

We paid a security deposit in which now my landlord states was first and last months rent and the money is gone. Lease agreement strictly states we paid a "security deposit". Also, in our lease is a building for utilities (washer/dryer) and for our storage. Landlord has never cleaned out their stuff for us to store and now they have gone in, built a wall for her husband to use 3/4 of the building for his personal use and we only have access to our washing machine and dryer. No storage area. Can we state to her that she has breached our contract and we are giving her a 30 day notice without being penalized?