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Skipping last month's rent when they have your security
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What are people's experience with not paying last months rent? I have had a bad experience with my management company and do not trust them to give me back my security deposit. I know it is frowned upon, but would a management company take legal action when they have the security deposit?

They certainly have that right and could drag you into Housing Court. As a practical matter, unless you've really trashed the apartment, it's not worth the bother, they will just keep your security deposit. But it does cause ill will and your next potential landlord may well ask who your previous landlord was. More importantly, if you ever decide to buy, the bank whom you are trying to get your mortgage from will most certainly call in this tight credit environment and ask about payment history. Do the right thing and pay your last month's rent. You can fight with them over security later.

if you need the money don't pay your rent. the landlord will cheez you out of some or all of it. unless you really have done some damage in which case you should pay for it.

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There's a practical problem with not paying the last month rent as a lease requires. The LL may not cooperate in your move out. If you are not paid up, the LL can block movers from entering, bar use of the elevators, and otherwise make your move miserable. I haven't any idea how large a building you are in, but I found that the key player in this was the super. I greased my old super with a nice tip the x-mas before I moved, I have him another $50 or $75 or something the day before I moved for "any inconvenience my move would cause," and I gave him an a/c unit that was new but which I had no use for in my new place. His assessment of my apartment was that it was perfect (which it was) and while it took the awful managing agent/LL 10 weeks to return my deposit, I did eventually get it in full. My advice: play nice with the super and building staff since they are the ones doing the inspection for the LL in most buildings. And after the inspection just ask if they see anything you need to address before leaving.

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I am a landlord. I would not take any tenant who didn't pay last month's rent of prior landlord. How about honoring the obligations you agreed to?

how about landlords not making up BS reasons to keep peoples money ?

Still, it is common for renters to use the security deposit as the last month’s rent, Mr. Abramson said.

http://realestateqa.blogs.nytimes.com/2009/06/19/using-security-deposit-as-final-rent-payment/

http://www.nyc.gov/html/unccp/html/legal/faq.shtml

Landlords must treat the deposits as trust funds belonging to their tenants and they may not merge deposits with their own money. Landlords of buildings with six or more apartments must maintain all security deposits in bank accounts earning interest at the prevailing rate. Tenants must be informed, in writing, of the bank's name and address and the amount of the deposit. Landlords are entitled to administrative expenses of 1% of the deposit annually. All other interest earned on the deposits belongs to the tenants.

http://answers.yahoo.com/question/index?qid=20080916065654AABOzyQ

I don't know what state you live in but in NJ... You have a right to use the security deposit as rent.The law also says that if the landlord does not put the security money in a proper bank account, or does not give a proper written notice to the tenant every time the law says he or she has to, then the tenant can give a written notice to the landlord telling the landlord to use the whole deposit (plus seven percent interest per year) to pay the tenant’s rent. (But be sure to read the next paragraph, which talks about a special situation.)

This notice should be sent to the landlord by certified mail, return receipt requested, and you should keep a copy. The money can be used to pay future rent or any back rent the tenant owes. Once a tenant legally tells the landlord to use the security deposit as rent, the landlord can’t ask the tenant for another deposit as long as the tenant lives in the apartment or house.

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i know AbsAJ03 that he second part applies to NJ, but i've read the same think about NYC, just cannot find it. in our case, we are not told were our security deposity is being held and how much interest is being earned each year... hence, we are allowed to send a certified letter saying "i'm leaving, use the deposit as last month's rent... bye bye... " but it has to reach the company more than 30 days in advance.

my gut feeling is that as we are in a big building owned by a big management company with it's own crew members that repair the apartments... and they do a deep screening of tenants, they prefer to have access to the deposits right away than to protect themselves against the need for huge repairs of the unit after the tenant leaves.

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I wouldn't skip out the last months rent ... they can mess up your credit

To put it as simple as possible, your chances of renting another unit in Manhattan becomes much more difficult, as general applications will ask for your current/previous landlords information, and most will follow up with them. (mainly to only see if they were in financially good standing with their landlord)

Hugh_G: no idea who you are on here, but thank you for your very tempered and thoughtful contribution above.

Violating the terms of your lease creates a sort of free-for-all in terms of how any resulting dispute gets resolved. Non-lawyers unfamiliar with realities of the law love to spout about supposed technical legal rules (e.g., "a LL can't legally block a tenant from moving out) and who has a "right to sue" and what "rights" the parties have. In practice, the letter of the law rarely means much in small claims (or many other) conflicts. Humans are involved here--not computers. Humans behave unpredictably and creatively in resolving conflict and often the law never comes to bear. Few LLs would ever actually file and pursue a claim of damages if a tenant uses the deposit for last month's rent. But the LL can do a lot to make the tenant's life miserable as pay back. Similarly, few tenants ever win much in a deposit suit since the suit would most surely be settled for no more than the deposit before the suit progresses to a trial. It's just a bunch of aggravation. And no tenant practically speaking could sue over the LL threatening to gum up the move out. It's all a game on both sides. But for a tenant, is the aggravation that results from using the deposit as rent really worth it?

Once the terms of a lease are violated, the resolution is typically worked out through games of chicken, lots of letters and emails fired back and forth, or after tons of aggravation in the hall of small claims court. Technically, maybe the LL can't block your move and the LL would do well to rid himself of a tenant playing games. But the LL can gamble that a day or two of threatened lack of cooperation will get a soon-to-be ex-tenant to reconsider the withholding of he last month's rent. I have little sympathy for people who make a contract and then don't hold up their end. If a tenant agrees to pay last month's rent and wait 8 weeks for a deposit to be returned, then that is what the tenant should do. If the LL fails to pay, then the tenant sues. That is the ethical way to proceed. Period.

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There is absolutely no reason why a security deposit cannot be used as rent. The security deposit belongs to the tenant. It is the tenant's money. It is held by the landlord as long as the tenant lives in the apartment. You decide to move out, use the deposit as last month's rent, and then you are out of the apartment.

very simple, and much easier than trying to collect from a landlord.

And what of those words that say "Tenant shall not use deposit as last month's rent" on that piece of paper you signed, HR?

I agree with happyrenter, and am surprised at how many people on this thread disagree. The key statement in the OP's quesion is "I have had a bad experience with my management company and do not trust them to give me back my security deposit". Yes, he/she signed a contract, but so did they, and if they are shady and you don't trust them to live up to their end, there's nothing wrong with protecting yourself. Kylewest is right about the free-for-all, but unfortunately, in my experience, that has already been created by shady landlords over the years.

I've lived in, and moved out of, a lot of rentals in NYC, and have had all sorts of experiences. Broad categories:

1) I've trusted my landlord and expected them to act honorably. So I paid last month's rent. Also, in this case, I've asked for a walk-through of the apartment as far ahead of time as possible, so if they find anything, we can discuss/resolve it ahead of time, and perhaps I can even remedy. That way I would not be surprised. In each of these cases, they've returned my full deposit.

2) I did not trust landlord based on past behavior. So I've used security deposit as last month's rent on several occasions. I've never, not once, had any issues with landlords/moveouts, or with my credit, or with getting my next place, or any of the other negative consequences people here describe. Not once.

3) I've "done the right thing" once and paid the last month's rent despite my misgivings. I then get a letter from landlord that says something like: "Here's $xxx of your security deposit, less the $yyy that I deducted for damage, cause by you". Of course, there was no damage. And of course, I had no practical remedy. That was the last time I did that.

I don't have any statistics, but anectodally, I know a ton of people who have used deposit as last month's rent, for the same reasons I used to. And I don't know of a single instance where's it's caused a problem in any way. Conversely, I also know a ton of people who got screwed out of all or part of their deposits. And I don't know of a single instance where they were able to get any of that $$ back through legal or other formal means.

So, with all due respect, "You can fight with them over security later" is an idiotic statement. Why rely on a "fight" you know you will lose.

nb99, you make a very valid point on assessing the LL's past behavior, which is why I withheld comment until HR's answer that there is no problem ever with using the deposit. You are in violation of your contract, and you are using the LL's non-performance in some other area as a justification for this non-performance. Fine, but let's not give an impression that doing do puts one on the legal high ground.

BTW, on #3, did you try small claims court?

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yes but in reality the LL is gonna keep ur money or at least some of it no matter what. as a tenant, you are taking to much risk by thinking the LL is gonna give you all ur money back. as long as you didnt trash the place..keep ur money becuase then you dont have to worry about it. In this market..any decent person with ok credit and stable employment wont have any problems renting a place.

I have never had a LL that did anything other than return the full deposit. Maybe once, a portion was kept for a professional cleaning, but this was pre-specified in the lease and the LL said to not bother cleaning when I left. I don't know who the rest of you have been dealing with.

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inonada, to answer your question - no, maybe I should have. For better or worse, I know of a lot of stories of people getting screwed out of their deposits, and don't know of any where they got all/some of the $$ back in small claims court. Not to say it can't or shouldn't be done, but either people don't know how to do it, or they don't bother, or they fail - I honestly don't know.

Jason, you are being a little bit silly. There are lots of things you are legally not permitted to do that (a) you probably practically do, and (b) you are not hurting anyone by doing. Jaywalking for instance. Very clearly against the law. I suppose you never jaywalk? If you didn't damage the apartment, you are not in any way harming the landlord by using your deposit as last month's rent. They end up with exactly the same $$ as they would if you paid rent and then they returned the deposit. So why get so upset over it?

Obviously, if you did damage the apartment, it's a different story. I would never advocate damaging the apartment and they trying to weasel your way of paying for it - that's simply theft.

As for personal experience, I've had 2 instances with reputable management companies that both returned the deposit no problem. I've had 3 "problems" with landlords where I either got screwed, or felt that I had to use the deposit as last month's rent to avoid getting screwed. Of those, 1 was a reputable management company, and two were individuals.

Again, anekdotally, I know of a ton of people that got screwed on deposits. Certainly not a majority, but frequent enough that it warrants taking into consideration.

Everyone seems to say they know a ton of people who used their security deposit for last month's rent and nothing bad happened to them. Does anyone know of the opposite? Of tenant's credit being harmed because they used the security deposit?

inonada
8 days ago
ignore this person
report abuse And what of those words that say "Tenant shall not use deposit as last month's rent" on that piece of paper you signed, HR?

this is absolutely correct. all standard leases state that you mustn't use the security deposit in lieu of last month's rent. it is part of the lease, and enforceable. you are violating the terms of your lease by not paying the last months rent, which can have long term effects on your credit score and ability to rent in nyc.

jason10006, newbuyer99, AbsAJ03 -

To sum this up a bit, I think the operative word is "can", as in renters_sweetspot70's comment:

== "you are violating the terms of your lease by not paying the last months rent, which --> can hottest t risk it, but I can see how others could.

sorry - disregard the above - having trouble getting my comment to post properly

I have had my deposit kept by a large management firm, in spite of the fact that I left the apartment in immaculate condition - even has it freshly repainted white. So I know people's money can be kept for no good reason. I am about to move out of an apartment in a doorman building near Central Park South owned by a small management firm which has not played fair with me all along. I've payed my rent on time, never made a problem for anyone, made no complaints and will be leaving the apartment in perfect condition, but I know - and have suspected for a long time - that it has no intent to return my deposit. It's made moving out difficult, and even tried to get me out three days earlier than my lease states. Does anyone have any advice about what I might be able to do do protect myself? The firm refuses to do a walk through with me, just wants me to hand the keys to the doorman. I will be taking photographs of everything, but I am not sure what good they will do me.

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We recently vacated a rental after a 1-year lease with one of the city's largest management companies. We paid the last month's rent on time, as we had throughout our tenancy. Ours was also a totally uneventful tenancy -- no complaints and no problems. We vacated the apartment broom clean and in excellent condition but showing normal wear and tear from a year's use. We also had had a cordial relationship with the building staff and super, including tips when warranted, meaning at Xmas and when we moved in (although not before moving out as KyleWest did).

And when did we get our security deposit back? 28 days after we vacated. 100% of it. And before the check arrived we received an email confirming our new address and letting us know the check was forthcoming.

It was part of the rental agreement that we pay the security in advance and that we'd have to wait for it to be returned, subject to the landlord confirming the condition of the place we had occupied and agreeing that it was in close to the pristine condition of the place we first occupied. We've been owners for years -- before this rental and after it -- and so maybe that's why this rental agreement seemed completely reasonable to us.

I know there are bad landlords out there, and likewise, bad tenants. But for the most part, it's been my observation that both sides tend to treat each other with an even hand. Like most things in life....

My experience is the same is NextEra - other than a single landlord when I was in college 20 years ago who withheld money to clean the place and repair ordinary wear and tear, I have never had a LL withhold a dime of my deposit (and I have had at least 10 large and small landlords over the years; some good landlords and a few not so good). The simple fact is that the deposit is not intended to be the last months rent - read your lease - it is there to cover damage to the apartment. Having said that, I doubt a LL would do a whole lot (but this is based on a guess and nothing else; While the LL may be able to sue for the last month's rent, if you left the apartment in good condition, a court would probably not award any damages or at most, nominal ($1) damages). I do, however, think there might be a database the landlords use that tells if you have been a problem tenant. I only say this because when I have signed new leases, I have had a few landlords make a passing reference to it (and I don't think they were referring to Experian and the other credit reporting agencies). Perhaps one of the brokers on here knows about this and whether a LL would report you to this database (or perhaps I just misunderstood them).

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So, when you're moving in, and they want 1st month, last month, and 1 month's security,
the "last month" is NOT your last month's rent?

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Splaken, I have done first, last, and deposit.

splaken - happens all the time, particularly in the case of questionable credit, students in need of guarantors, foreign nationals with no credit in the US, etc. etc. often you may find landlords requiring 6 months' upfront in a combination of rent and security; in the case of bankruptcy, up to one year of a combo.

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The only time I had the issue with security deposit is when I rented for 9 months from an individual. He deducted $1000 cleaning service expense which was certainly excessive. The apartment needed a bit of cleaning which any maid could have done for $100. However, the landlord opted for steam cleaning and other high end cleaning methods.

Splaken, the place is from an individual owner.  The owner might have asked for first, last, and maybe 2 months deposit at first?  Mind you, my credit was over 800, and my income and liquid assets were way up there.  I figured there was some over-worrying (having last month so that deposit isn't used in it's place, worried about banging up of nice place, who knows).  I don't care about shuffling the money around in time, but even 2 months deposit on top of it all was over the top even for me.  So we agreed on a 1 month deposit as I wanted the owner to feel comfortable.  The only concern for me was credit risk, so I checked that there was lots of equity in the place so there'd be something to sue if necessary: there was plenty and there still is.

The first benefit was the place was extremely well-priced, so I didn't want to rock the boat.  Arguably, I could have negotiated the point and gotten the place regardless.  The second benefit was general goodwill and brownie points to be cashed in later from being an ideal tenant.  I have since cashed in various chips.

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Agreed.

As a landlord you should not think a security deposit can be used as rent......

What if you break something in the apartment? You should be held liable for your actions... We've had people muck up the staircase having the movers bang the bed frame into every wall they see...

Also the tenants would put stickers all over the walls and leave nails from mounted pictures on the wall.

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As a small owner, it is very clear that security deposit is a deposit to secure the property, i.e. the apartment is returned in a clean and desirable condition as he/she first moved in. I return security deposit 30 days after tenant moved out. I need the time to have a good review of the apt. It is unreasonable to ask to check the apartment before it is emptied, because damages can be caused during the move, such as the apt door hinge was damaged so it cannot close properly. Wall-to-wall carpeting or hardwood floor showed up damages under furniture. Built-ins got chipped in several small areas which made it unsightly or impossible to repair to a presentable state. Apt is left so dirty and full of rubbish which require several days to clean, and also the time cuts into my time period to re-rent. The cost of loss of time to re-rent never seems to occur to any renters. It is a nuisance to go through courts etc. but I definitely will file with credit checking agencies to warn future owners. Small Owner.

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I don't know why landlords think they're some type of authority figure on anything.

The lease is really a starting point for a negotiation in my view because the LL never really follows it to the letter anyway and a court will always rule for tenants anyway.

I've had a leaky faucet for like 3-4 year maybe in an old apt. I didn't bother with this since there were more pressing needs which was like pulling teeth to get anything fixed. Also no heat in the bathroom. And i don't mean the heat didn't work I mean there is nothing -- not even a steam pipe a violation of city ordinance.

I have not paid last months rent on the last 2 places i left. why bother? If they want to sue let them deal with it. I'd rather cross that bridge than deal with me trying to get back my money and be out the 1000 dollars while they take teir sweet --- time gettting back to me (if they get back to me).

1000 is should have read. haven't had 1000 rent since rent control queens many moons ago

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Contract law contemplates contracts being broken. Whoever above said that it wasn't morally right, OK, but the law anticipates contracts can be broken. It's not illegal in the sense of going to jail, or that a crime has been committed when you break a contract. In some special cases and in some areas it can be, but of the most part, no it's not.

Contract law teaches us that in most cases it is good for one party to break a contract if it is more advantageous for them to do so. That means, if the consequences are out weighed by the benefits.

I've asked my current land lord if they will do a walk through of my apartment before I give them the last months rent. Why? Because there are 96 apartments in this place and over the last year I have heard more than once not to expect the deposit back. Are those things true? No idea, but I am concerned because I figure it's harder for me to sue the land lord and win, than it is for the land lord to sue me. The land lord effectively refused, wanting rent first. It doesn't sit well with me.

Now, the other thing is will it affect my credit if I don't pay last months rent on time? I am not sure how it will since my landlord has not reported my payments for the last 11 months, which were all on time. You see the point? They do not record with a credit agency, good luck with sending a letter to one complaining. The only problem is if they sue me and a judgment gets entered, which will not happen (since there's no damage I am aware of, and I would pay anything from a court immediately).

I actually am having a hard time not paying rent because I think it's morally not the best choice, the legal side of me says it's business and not paying is the best legal choice. I am going with the later.

Just an opinion - if your landlord refuses to do a walk-through ahead of time, that's total BS, and if I were in your shoes, I would not pay that last month.

I've asked for a walk-through ahead of time a couple times, for the exact same reason as you, and each time the landlord accomodated, I paid rent, ultimately got my deposit back. No problems on either side. In fact, the last time I thought the landlord was too generous, since we damaged the floor a bit moving out, and I expected them to deduct $200-300 from the deposit, but they didn't.

Other times, when I heard bad things about the landlord, and/or had already had bad experiences myself, I used the deposit for the last month's rent. Never had a problem doing it that way, either.

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When it's clearly imminent that the landlord is going to be in breach of contract, there is no reason why the tenant should wait for the breach before taking action to mitigate damages. If you're going to withhold last month's rent, just make sure you have sufficient evidence such that it would be reasonable to anticipate that the landlord was going to breach the lease.

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After 64 comments, no one has listed a personal case of being taken to court by a LL for their last month’s rent. On the other hand, several of you have told in detail about being cheated out of your deposits. The naysayers can quote contract law, HPD regulations and various websites, even warn of the horrors of small claims court judgments. But let’s see a real example of someone going to court and then having to move back home after being branded with a scarlet A of unrentablity.

If your landlord hasn’t been aboveboard throughout the length of your lease then don't pay the last month. In the real world a company/individual that won’t fix your broken toilet for 2 years probably won’t return the deposit without confrontation.

Come on people! It’s a part of the NY experience, just like the whole double parking for alternative side street cleaning. Sure, its illegal and sure most traffic agents look the other way but every time you do it you take a chance. And the 1% of the time you get a ticket you accept it and move on.

I had to threaten to take Flatbush Gardens to court before they finally returned my deposit (4 months after I vacated). Meanwhile, my neighbor and friend kept his last month’s rent and they never contacted him again. At least they were consistent, in that they were lackadaisical to the very end.

At the end of the day, take any anonymous online advice with a grain of salt. If you’re the type of person who will worry about a possible lawsuit from an unscrupulous LL then pay your rent and hope for the best. Otherwise move and be merry. Btw, I’ve never had to give references for any apartment I’ve rented. A credit check, paystubs and deposit were reference enough.

in the process of breaking our lease at the permission of our landlord. Since the building changed hands and we do not trust them, meaning they told us if we gave them at least 4 weeks notice they would show the apartment and get it rented, at most they would ask us for one more month if it did not rent. Well we gave them 6 weeks notice and they did nothing, so we did not pay September rent and are letting them take the security deposit against it. Since they did not even attempt to show except to one tenant already in the building, I was not going to give them september to have them then ask for october. All was in writing via email at least so not concerned. Plus since i just purchased a place not really concerned about rent verification anymore.

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Jason1006 - Your nytimes "story" is just a posting in the Q&A section. In fact your helpful link is chock-full of comments from even more tenants being cheated out of their deposits. Even the expert in your "story" responded with "Still, it is common for renters to use the security deposit as the last month%u2019s rent...Since the landlord-tenant relationship is ending, 'there is very little that the landlord can do other than sue for any costs of repairing the vacated apartment that would have otherwise been covered by the security deposit'"

It%u2019s also illegal to not curb your dog. How many people have stepped in dog crap compared to how many people have seen someone receive a ticket for it?

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Name calling, now that's productive. Your article doesn't list any specific case of a tenant being taken to court and/or blacklisted. So still no real world story...

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my husband and i are currently using our deposit for our last month as our landlord lied about not raising the rent then subsequently notified us 2 weeks prior to our lease ending that he was raising it by 25%/month knowing that we had just had our first child and had no intention of moving. our LL's track record of lying lets us know we couldn't trust him to get the full deposit back especially as we need that $ to move to quickly scramble to get into a new apartment. had he just told us the truth when we met with him face to face about renewing our lease 3 months prior this never would have happened. he brought this upon himself.

What if your landlord has already broken the lease? My problem is during this 1 year lease period, during which I have paid my rent on time every month, there have been several unresolved issues. First, the lock on my mailbox has been completely broken, meaning, it does not lock at all, the entire year. They were even given a violation by the city and it has not been fixed, leaving my mail (checks, personal items, etc) vulnerable. Part of the lease agreement is that they will maintain my mailbox. Also, the boiler was broken for the entire winter. It would go on and off. We had many days with absolutely no heat, where i was wearing full outdoor gear and almost crying sitting on my couch. Many calls to landlord resulted in "yeah yeah we are fixing it" and then it would eventually come back on and then break again the next week. Obviously we needed a new boiler. Calls to the landlord resulted in "yeah yeah call the super."....We got a new boiler just in time for Spring. This violation is on record at the NYHA. Also, I have researched this management company online on yelp, etc, and there are over 15 reports of this companies negligence and specifically not returning security deposits. Several people have cited that they will charge $125 per nail hole, and similar absurdities. I think that technically speaking, this company has already broken the lease, and that there is enough anecdotal evidence that they historically do not honor security deposits. Also, I have not damaged this apt.

I was planning on moving out and my landlord used my security deposit for the rent which we agreed on for the month of june he told me if I choose to stay I would have to pay julys rent. But now he is asking me for both security and rent do I have to give him back the security?

my 1 year lease is up I haven't signed a new lease, but continue to stay and pay my rent. If I decide to leave can I use my security dep as my last months since I no longer have a lease?

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