Legal Question in Landlord & Tenant Law in California

If it was clear that they were going to rent the unit and it was available on the date they planned to move in, then you have an oral rental agreement and they must give you 30 days written notice of vacating. You carried out your part of the contract, detrimentally relied upon them by getting the other tenants to leave early, so the contract was completed. The security deposit can be used to cover unpaid rent.

Inform them that you spoke to a real estate attorney who informed you as above. Tell them that if you can rent the place out before 30 days you will give them a pro rata refund, but technically the 30 days does not begin to run until they give you written notice. Point out that if they go into a restaurant, order a meal, and then when the food comes say they no longer want it, do they not think they are liable to pay for the meal. The restaurant owner may be willing to "eat" the $10 loss on the dinner, but you can not be so generous with the much larger monthly rent amount. Be sure that within 21 days you send them a letter detailing all the deductions you have made as to the security deposit and why. Next time get it in writing and require a non-refundable holding charge that will be applied to the rent as due. Tell them that unless they can show you case or statutory law to the contrary there is no reason to keep on discussing the matter and you will consider it harassment if they keep on trying to contact you. If you want it to sound more convicting, I or another attorney can wrlite a letter to that effect. But respond to them quickly.