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Updated about 6 years ago on . Most recent reply

User Stats

10
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2
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David Mcginnis
  • Investor
  • Bellevue, WA
2
Votes |
10
Posts

Security deposits on a foreclosure auction purchase

David Mcginnis
  • Investor
  • Bellevue, WA
Posted

Recently looked at an occupied 3 unit building that was scheduled for foreclosure. Presumably, the tenants has posted security deposits for their units. And presumably, if I had purchased at auction, I would then own the building but I would very likely not have the security deposits.  If a tenant subsequently moved out they would want their security deposit back. Technically, I would not be a party to the lease that they had signed, but I beleive in Washington an auction buyer has to respect at least some aspects of the existing lease.  In my non-legal view, my responsibility would be to respect the lease rate and their occupancy rights (things that I have some power to control) but the former landlord still holds the deposit and the tenant could seek recourse against that person, who has a direct legal responsibility to refund (if the tenant satisfied the refund criteria).   Seems like I don't  benefit from a security deposit and should not be responsible for refunding. Also, if I sign new leases with existing tenants, I will have a difficult time convincing them to post a new security deposit. Curious if anyone has any practical experience about how that might get sorted out. 

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