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Tenant Guide Advanced Payment
Many landlords require tenants to pay “last month’s rent” at the beginning of the tenancy as part of the security deposit or at the time the security deposit is paid. Whether the tenant can use this amount at the end of the tenancy to pay the last month’s rent depends on the language used in the rental agreement or lease.212
Suppose that at the beginning of the tenancy, you gave the landlord a payment for the last month’s rent and for the security deposit, and that the lease or rental agreement labels part of this upfront payment “last month’s rent.” In this situation, you have paid the rent for your last month in the rental unit. However, sometimes landlords raise the rent before the last month’s rent becomes due. In this situation, can the landlord require you to pay the amount of the increase for the last month?
The law does not provide a clear answer to this question. If your lease or rental agreement labels part of your upfront payment “last month’s rent,” then you have a strong argument that you paid the last month’s rent when you moved in. In this situation, the landlord should not be able to require you to pay the amount of the increase for the last month.213 However, if your lease or rental agreement labels part of your upfront payment “security for last month’s rent,” then the landlord has a good argument that you have not actually paid the last month’s rent, but have only provided security for it. In this situation, the landlord could require you to pay the amount of the increase for the last month.
For example, say that your rental agreement labeled part of the total deposit that you paid when you moved in “security for last month’s rent,” or that “last month’s rent” is one of the items listed in your rental agreement under the heading “Security.” Suppose that your rent was $500 when you moved in and that you paid your landlord $500 as “security for the last month’s rent.” Suppose that you also paid your landlord an additional $500 as a security deposit. If the landlord properly raised your rent to $550 while you were living in the rental unit, you can expect to owe the landlord $50 for rent during the last month of your tenancy (that is, the current rent [$550] minus the prepaid amount [$500] equals $50 owed).
If your rental agreement calls your entire upfront payment a “security deposit” and does not label any part of it “last month’s rent,” or “security for last month’s rent,” then you will have to pay the last month’s rent when it comes due. In this situation, you cannot use part of your security deposit to pay the last month’s rent. However, you will be entitled to a refund of your security deposit, as explained in the next section.
212 Brown, Warner and Portman, The California Landlord’s Law Book, Vol. I: Rights & Responsibilities, pages 96-97 (NOLO Press 2009).
213 Portman and Brown, California Tenants’ Rights, page 243 (NOLO Press 2007); see Brown, Warner and Portman, The California Landlord’s Law Book, Vol. I: Rights & Responsibilities, pages 96-97 (NOLO Press 2009).
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