Here's the deal: You don't need to withdraw and return the current security deposit just to collect the additional $100.

Yes, you can deduct the 8 days rent from the security deposit.

Now, over a year and a half later, he sent a certified letter last week demanding the security deposit or legal action within 30 days.Please advise. 

The pet fee or deposit for the move in of 2 cats (you did charge one, I hope) should have just about covered the extra anyway.

If it's not a holiday, I would say, "No, the deposit remains in place until your lease ends."

Quote from @Phillip Austin: There are two alternatives to a security deposit, which I speak about in my book.

After searching more, I found a few BP post where people seemed to have one account for all deposits, and keep only deposits in there.

Hey @Thanh Lu, we don't do much direct bookings but we do have a $500 security deposit.

WOW.. 40k plus deposits on a home to be built.. ??? 

Quote from @D'Ann Melnick: Saw this was an old question, but it came up in search - this is all part of the rent stabilization laws passed in 2024 - https://www.montgomerycountymd.gov/DHCA/Resources/Files/tena...The pet deposit cannot exceed $300 and the total amount of security deposits collected cannot exceed two month's rent.