Our landlord put our security deposit in a CD without telling us and won't use it as last month's rent, can he do that?

The landlord is required to place you security deposit in an interest bearing account and return it to you if there are no damages to the apartment at the end of your tenancy term.  The landlord also has the duty to repair the premises when things are broken or damaged.  if you caused the damages the landlord may deduct the money to fix them from your security deposit if you fail to pay them them.  As far as the last month's rent is concerned, the landlord is not required to use the security deposit to pay the lasts month's rent because that money is alloted to paying for any damages.  if there are no damages that you are being assessed with, the the landlord may, with your permission or in accordance with the lease (if one exists) put the security deposit towards last months rent.  if you have walked out, the landlord has the option of keeping the deposit as last months rent or putting the deposit towards fixing damages and then seek the balance of the rent from you in court via collection action.  I would not do anything unless you get sued.