California law specifically allows the landlord to use a tenant's security deposit for four purposes:

• For unpaid rent;
• For cleaning the rental unit when the tenant moves out, but only to make the unit as clean as it was when the tenant first moved in;
• For repair of damages, other than normal wear and tear, caused by the tenant or the tenant's guests; and
• If the lease or rental agreement allows it, for the cost of restoring or replacing furniture, furnishings, or other items of personal property (including keys), other than because of normal wear and tear.

A landlord can withhold from the security deposit only those amounts that are reasonably necessary for these purposes. The security deposit cannot be used for repairing defects that existed in the unit before the tenant moved in, for conditions caused by normal wear and tear during a tenancy or previous tenancies, for attorney's fees and costs for bringing an action for unlawful detainer, or for cleaning a rental unit that is as clean as it was when the tenant moved in. A rental agreement or lease can never state that a security deposit is "nonrefundable."

Under California law, 21 calendar days or less after the tenant moves out, a landlord must either:

• Send the tenant a full refund of the security deposit, or
• Mail or personally deliver to the tenant an itemized statement that lists the amounts of any deductions from the security deposit and the reasons for the deductions, together with a refund of any amounts not deducted.

A landlord also must send the former tenant copies of receipts for the charges that the landlord incurred to repair or clean the rental unit and that the landlord deducted from the security deposit. The landlord must include the receipts with the itemized statement.

The landlord must send the itemized statement, copies of invoices or receipts, and any good faith estimate to the address that the tenant provides. If the tenant does not provide an address, the landlord must send these documents to the address of the rental unit that the tenant moved out of.

The landlord is not required to send copies of invoices or receipts, or a good faith estimate, if the repairs or cleaning cost less than $126 or if the tenant waived the right to receive them in writing.

What if the repairs cost less than $126 or the tenant waived the right to receive copies of invoices, receipts and any good faith estimate?

The landlord still must send an itemized statement 21 calendar days or less after the tenant moved, along with a refund of any amounts not deducted from the security deposit.

According to the California Supreme Court, if the landlord doesn't provide a full refund, or a statement of deductions and a refund of amounts not deducted, by the end of the 21-day period as required by law, the landlord loses the right to keep any of the security deposit and must return the entire deposit to the tenant.

Failure of the landlord to provide a full refund, or a statement of deductions and a refund of amounts not deducted, by the end of the 21-day period may make the landlord liable to pay the tenant the amount of the improperly withheld deposit, plus up to twice the amount of the security deposit as a "bad faith" penalty.