In Chapter 20 of The California Landlord's Law Book, landlords are advised on what to do if a tenant with a lease moves out early, leaving several months remaining on the lease. The text and example under “Leases” do not correctly explain to what extent a landlord may use the deposit to cover unpaid rent.
The following text and example should be substituted for the entire text under “Leases.”
If a tenant leaves before a fixed-term lease expires, you are normally entitled to the balance of the rent due under the lease, less any rent you receive from new tenants before the end of the lease term, or could receive if you make a diligent effort to rerent the property. However, you cannot deduct from the security deposit any rent other than past due rent, namely any rent that came due while the tenant was in possession of the property. You can sue the tenant in small claims court for any other rent to which you may be entitled for the remaining term on the lease, though a judge is likely to want to know why you couldn’t rerent the property. (See Chapter 19 for a discussion of a landlord’s duty to find a new rent-paying tenant as soon as possible.)
Example: On January 1, Will leased his house to Anthony and his family for $1,200 a month, due on the first of the month. On June 8th, Anthony moved out without having paid June's rent, plus he will owe for six more months (July through December) remaining on his one-year lease, making him responsible for $1,200 past-due rent for June plus six months' more rent of $7,200.
Within 21 days, namely by June 29th, Will must account for the deposit, and may deduct from it only the $1,200 rent for June that came due while Anthony resided on the property, in addition to costs for necessary cleaning and repairs. For the rest of the rent, Will may sue Anthony in small claims court.
Will is unable to re-rent the property until October 1st, again for $1,200 a month. Will's small claims suit should be for $3,600, the rent for the months of July, August, and September, plus $175 he spent advertising the property for rent.