Legal Question in Real Estate Law in California

What a hassle! I think you have two possibilities, neither much fun. You can continue not to pay the withheld rent, go to court when the inevitable unlawful detainer lawsuit is filed, and present your water-bill evidence as a defense, being prepared to pay up if necessary. Or, you could pay up and then file a small-claims suit for a judgment to get reimbursed. In neither case can I guarantee you'll prevail based on not knowing much about the facts.

If they file an unlawful detainer,use the water issue as an affirmative defense . Contact me directly,

If you use the water issue as an affirmative defense to an unlawful detainer you will lose and be evicted. You can only withhold rent for issues that make the property fully or partially uninhabitable, AND the landlord fails to correct them. In fact the only way you can make sure that a habitability issue is a defense is if you call the health department or code enforcement, they cite the landlord, and the landlord STILL doesn't repair the problem for 35 days. You don't HAVE to do that to assert the defense, but that is what is required for it to be mandatory that the court accept the habitability issue as a defense. You also do not have a "pay and deduct" option because that only applies when you make the repair. Your only option is to pay your rent and take them to small claims court. If they then try to evict you for taking them to court, THEN you have a defense of retaliatory eviction.