I would have to look at your rental agreement. If the agreement does not address a security deposit, and it states as you say it does that you only had to put up $1600, no security and just to pay your $1600 on time, then you are within your rights.
The problem here is that most lease or rental agreements DO provide for at least one month's security deposit, usually the same amount as the first month's rent.
The issue here is do you really want to fight about this and maybe lose your lease, or try to work with the landlord.
I would offer to pay a security deposit, but not the late fee, and make sure you get an addendum in writing to your lease agreement that you gave the landlord a $1600 security deposit.
If you can't come up with all of that in one month, offer to pay it over two or three months in installments.
If you really don't think any of this is fair, you may exercise your rights in court, but that will cost you a lot of money and put you in a bad light in the future.
Try to work it out.
This is general legal advice intended for informational purposes only and does not create and attorney/client relationship. If you wish further advice, please contact an attorney of your own choosing or you may contact me for further advice and make other arrangements including retaining my services.
I respectfully disagree with my colleague Mr. Weitzman. A 3-Day Notice to Pay Rent or Quit may NOT contain any charges other than rent. Period. Full stop. A landlord may NOT include an unpaid security deposit nor late fees on this type of notice. You may ignore that notice and suffer no legal consequences. That’s not to say the landlord will not file an unlawful detainer action against. He may, but it will fail because of the defective notice.
The landlord may still sue you for a security deposit and late fees.
If the 3 day notice is to "pay rent" or quit, and you are up to date on rent (or, if you ARE behind - sounds like you're not - and the notice EVERstates the amount of rent due, you have a defense should he file a lawsuit based on the 3 day notice.
If the 3 day notice is to "perform" under the lease or quit, you may have no defense other than to assert that you have an oral agreement that the deposit isn't due for 6 months as agreed...
PLUS, he is NOT allowed to include current late fees in a 3 day notice to pay rent or quit, so if he includes that as a component of the total amount demanded, that is another defense to the lawsuit when/if he files it.
I agree that your landlord cannot evict on anything but unpaid rent and especially if the deposit section of the lease agreement is blank. You may have to appear at an unlawful detainer hearing. Bring all your evidence such as the lease agreement and any other paperwork you may have including your evidence of paid rent. It may cause a problem with your landlord in the future but your landlord is actually initiating the bad blood between you as it appears from your question. I would always recommend that you hire an attorney for an unlawful detainer but if you can't afford an attorney, then read the unlawful rules/statutes from your state and attend yourself. We can never truly predict what a judge will do so be prepared to argue or compromise in addition to preparing to win.