Tenant is suing for his one month deposit back since property was foreclosed. However, tenant did not pay last month rent before property went into foreclosure. Does the landlord owe money to the tenant.
Court will allow a set off. The deposit is to be used first to pay for any damage or repair caused by the tenant, and any remaining amount can be used to off set any unpaid rent.
From the State of Calif Dept of Consumer Affairs....
The most common disagreement between landlords and tenants is over the refund of the tenant's security deposit after the tenant has moved out of the rental unit. California law therefore specifies procedures that the landlord must follow for refunding, using, and accounting for tenants' security deposits.
California law specifically allows the landlord to use a tenant's security deposit for four purposes:
For unpaid rent;
For cleaning the rental unit when the tenant moves out, but only to make the unit as clean as it was when the tenant first moved in;190
For repair of damages, other than normal wear and tear, caused by the tenant or the tenant's guests; and
If the lease or rental agreement allows it, for the cost of restoring or replacing furniture, furnishings, or other items of personal property (including keys), other than because of normal wear and tear.191
A landlord can withhold from the security deposit only those amounts that are reasonably necessary for these purposes. The security deposit cannot be used for repairing defects that existed in the unit before you moved in, for conditions caused by normal wear and tear during your tenancy or previous tenancies, or for cleaning a rental unit that is as clean as it was when you moved in.192 A rental agreement or lease can never state that a security deposit is "nonrefundable."193
Under California law, 21 calendar days or less after you move, your landlord must either:
Send you a full refund of your security deposit, or
Mail or personally deliver to you an itemized statement that lists the amounts of any deductions from your security deposit and the reasons for the deductions, together with a refund of any amounts not deducted.
The landlord also must send you copies of receipts for the charges that the landlord incurred to repair or clean the rental unit and that the landlord deducted from your security deposit. The landlord must include the receipts with the itemized statement.
