Legal Question in Real Estate Law in California

It depends. The deposit is not only to secure the condition of the property; it is to secure performance of the lease, INCLUDING returning the property in good condition. When a tenant moves out before the lease end, the landlord is entitled to apply the deposit to rent owed and not paid, PROVIDED the landlord takes all commercially reasonable steps necessary to find a new tenant. A tenant who breaks the lease is liable for the rent until the landlord finds a new tenant as long as the landlord takes those commercially reasonable steps. If the landlord does that, the tenant is also liable for the costs of re-renting the property, such as advertising, etc., and the usual move-out costs of cleaning and repairs if any. The landlord gets to apply the deposit to all those charges, and then either sue the tenant for any shortfall because it takes a long time to find a new tenant, or return any balance of the deposit if the premises are returned in perfect condition and a new tenant is immediately moved in.

The deposit can be applied toward covering the landlord's losses from breach of the lease, which includes lost revenue due to the vacancy. However, there is a significant limitation on a landlord's right to re-collect lost revenue from the tenant upon an early move-out. The landlord cannot re-collect from a deposit, or in court, or by any other means, unless the landlord makes a bona fide attempt to find and rent to a new tenant, and fails. If Joe Doakes moves out 45 days before the end of his lease, the landlord must get the place ready for a new tenant and hang out the "For Lease" sign (figuratively speaking) as soon as possible, and only if no new tenant is found may the landlord expect to re-collect his/her/its losses from the security deposit.