Buying with tenants in place

[Justin Owens]

I am in negotiations on a condo with tenants in place. They are paying rent around $100 below market. Sellers don't want to deal with tenants or negotiate anything with them and spelled it out in the contract. 

My plan was to meet with the tenant during the inspection period and hash out a new lease with him bringing the rent up some, maybe $50. Once I am in escrow, while I don't own the property I do have some interest in the property. I assume I would be able to negotiate a lease with the sellers permission. If I put in a line that the lease would only be effective once I take ownership I should be good right?

How do security and deposits get handled? Turned over through escrow to me or handed back to tenant then to me?