No. Nothing is cancelled. If you want and expect them to leave by the end of their lease you have to give them a Notice to Quit (asked them to leave) all refunding their deposit did was give them money. If you don't ask them to leave, after the lease expires, they legally go into a month-to-month...
Best answer: Legally:
No. Nothing is cancelled. If you want and expect them to leave by the end of their lease you have to give them a Notice to Quit (asked them to leave) all refunding their deposit did was give them money. If you don't ask them to leave, after the lease expires, they legally go into a month-to-month rental agreement whether there's a paper lease or not and unless you talk to them or renew your own lease with them to change things such as increase or decrease rent or change rules or anything all State tenant and landlord rights and laws will apply.
No offense but it doesn't seem like you know the rental laws and you really should know them before you get yourself into a huge mess because you didn't take the correct due process steps. If you do not conduct due process, by law, being a landlord....you're going to dig yourself a hole and kick yourself in the butt into that hole just winging it and asking people on yahoo what to do.
Sound advice: Learn the rental laws.
You have the option of renewing the lease as it is with them, renewing an agreement with them on different (your) terms, or giving them a Notice to Quit 60 days before the end of their lease. The Notice to Quit is a form title that's part of a landlords legally bound due process in getting tenants out of their property.
In laymans terms:
You have to either renew the lease with them or ask them to leave.
If you ask them to leave it's best you do it correctly by law by giving them formal Notice to Quit.
If you do not do it correctly it's going to be a pain in the butt getting them out if you want them out.
That's if they don't want to leave and know the laws...
Your best idea is calling your county court house and being short like you were here with your question, tell them what you want (whether it's that they leave or stay) and ask them how you go about doing it legally and correctly.
Pennsylvania has free Legal Services that help people for free in situations like yours. One of them is called MidPenn Legal Services (They're in my area, not sure if they're state wide or not).
I highly recommend talking to a lawyer. If the court house also suggests that, that is truly what you need to do.
If you screw up the due process of what you want to do with a rental property you're creating a very bad bad bad nightmare for yourself. Learn the laws, learn the processes, or don't be a landlord because if you don't know how to do the processes correctly you're going to destroy yourself and your tenants and tenants families.