Landlord and Tenant entered into a one-year written lease for residential premises that began on January 1 and was to end on December 31. The lease provided a monthly rent of $1,000. At the time of the commencement of the lease, Landlord took a "security payment" from the tenant in the amount of $3,500, which Tenant delivered in cash. The parties did not discuss why that amount was taken. The lease provided that "Landlord will not be responsible for paying interest to Tenant for any security payments taken hereunder." The parties did not inspect the apartment together. Landlord ended up depositing the $3,500 cash Tenant had given him into a joint checking account he maintained with his wife. Landlord and Tenant exchanged no paperwork other than that mentioned above. Six months into the lease, Tenant told Landlord that he was experiencing financial difficulties, and asked Landlord to return the security payment. Landlord offered to return half of the $3,500. When Tenant demanded the entire amount, Landlord came over to Tenant's apartment to negotiate with Tenant. Upon seeing that Tenant's apartment was excessively dirty, Landlord stated he would not return any part of the $3,500 and left immediately. Tenant again demanded that Landlord return the entire security payment. Landlord has refused. Please discuss the rights, duties and liabilities of the parties. Assume the facts apply under California law.