It wouldn't be so bad for you if your demand notice to the tenant only said pay up in 3 days or ill take you to court, giving them a choice to pay or leave is not going to take you off the hook for following your states deposit law , Your free to hold onto the money to cover the months they did not pay you and still do the notice to the tenant with in 21 days of them leaving other wise even if you still file suit for the balance of unpaid rent & damage over and above the 1500.00 BUT since you are in the uber tenant friendly state of California Id suggest just doing the damn letter right away anyway since fair odds are what they owe you already exceeds the deposit and btw you mentioned future rent your not going to get future rent , work at getting it re rented and say it takes you 3 weeks to find a new tenant for example then you are owed a prorated amount from the former tenant and that any negative difference from the deposit is what you can ask for since that would add up to your actual financial harm. ( not a unproven number )