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You can't apply a last month's rent deposit unless this is your last month (or, in your case, the last two months). I don't know what state you are in, but it is unusual to give a two month deposit. If you have a rental agreement that requires 60 days notice to terminate, I guess that would make sense. But, unless you've given notice, then, yes, a prudent landlord would give a late notice.

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Q: I paid 3 months rent up front It was supposed to be for the first and last 2 months I have fallen behind in the rent payment and was served a 5 day notice. Are you allowed to apply the advanced rent?
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