Landlord says he can’t pay back deposit

By Seraph

I told my landlord yesterday that I would be giving my 30-day notice on the 1st of next month. I asked him straight up if he thought he would be able to pay me back my deposit. I have had a bad feeling that he would say "no" ever since I started to get notices from PG&E about their bills being unpaid. Well surprise surprise, he said that he probably won’t be able to pay it back to me. My deposit was a significant amount of money and I really need it back for a future deposit on a bigger place. So as far as I can tell my options are, as of now: A.) I can wait for him to rent out the place to someone else and he can pay me their security deposit, B.) I can stay there another month rent-free and charge him the balance, or C.) I can try to force him to pay me through legal action (small claims court). Anyone have any additional advice?

Also there is no way he is going to be able to pin any type of "damage/destruction of property" claims on me, since I am leaving the apartment in better shape than I found it in.

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Holy Cow, we couldn't find any other related post. Sorry. :(