Real Estate Law
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Unfortunately under CA law you have to return the deposit or send the accounting with in 21 calendar days from the date the tenant vacates. So if you did not do this within 21 days from the date they actually vacated, they are right and you have to return the entire amount and can not deduct for damages. However since you have circumstances that prevented you from meeting the 21 day time frame and you did not do it to intentionally delay the refund a court may allow you to deduct for some or all of the repairs. Until your tenant sues you, you can keep the money from the deposit, and if they owe more than the deposit you will have to sue them to get a court to order them to pay.