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Your tenant has actually used three (3) months of rent and possibly more. He has breached the lease in that he is leaving prior to the expiration of the lease term of one year.
Under California law, once a lease has expired, either party can give the other thrity (30) days written notice. In other words, if the landlord does not want to renew the tenant's lease, he must gove the tenant thirty days notice to vacate. Similarly, if the tenant wishes to move out, he must give the landlord thrity days written notice that he will be vacating the property. This Thirty day Notice is counted from the First day of the month so that, for example, if a tenant wants to leave on June 30, he must give the landlord thirty days notice not later than May 30, so that counting the 30 days from May 30, the tenant will have given the landlord the required 30 days notice.
In your situation, the tenant has breached the lease and he would not only be required to give you 30 days written notice, counting from the first day of the month, but he will also be liable for the rent for the remainder of the lease term until he, or the landlord (you) finds a tenant.
(Please note that if the written lease requires a greater number of days notice, say 60 days notice then the tenant must give 60 days notice of intent to vacate. This is true whether or not the lease has expired).
Therefore, your tenant did not give you 30 days written notice, nor did he start counting the 30 days from the beginning of the month. Since he gave you notice on April 15, the earliest he could leave would be June 1 because you begin to count the 30 days from May 1 (the first of the month). Therefore, June 1 would be the earliest he could leave, but he would still be liable for the rent until you found a new tenant.
The law imposes on the landlord the obligation to mitigate (lessen) his damages which is what you did, you found a tenant as quickly as possible. Whether or not it was reasnable to rent to a new tenant for $500 less per month would depend on what the total rent was. For example, if the rent you were reveiving was $2,500 per month and you now had to rent it for $2,000 per month which is $500 less per month than you were receiving, the Court would probably find that a wo% reduction in the rent was reasonable. If, on the other hand, the rent had been $1,000 and you rented it quickly to a new tenant for $500 and looked to the old tenant to pay the difference, the Court might not think it was reasonable for a landlord to rent it to a new tenant at an amount which was 50% less than what the former tenant was paying.
So, whether or not you can keep the rent which the former tenant paid you in advanc, as compensation for your damages would depend on the reasonableness of the amount you were charging the former tenant.
In summary then, you can keep the three months of rent without a problem. Keeping the balance to compensate you for your lost rent would depend onthe reasonableness of the rent you are charging the new tenant. The security deposit can also be treated as compensating you for loss of rents, again depending on the reasonableness of the reduction in rent paid by the new tenant, And also, you should inspect the property for any damage done by the former tenant. Probably none because his stay was so short, but you never know, so your really should inspect the property.
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