Does tenants deposit transfer to new owner?

Question

Derek Robinson · Answer

Yes, security deposits transfer.  Your closing attorney should be handling the funds.

Jessie Tetreault · Answer

yes, the security deposits transfer also depending when you close on the property you should be receiving pro rated rents for that month. Example if rent is due on the 1st and you took ownership of the property on the 2nd then you would be owed that rent from the 2nd down plus the security deposits/ unit.

Judth Felker · Answer

Absolutely, Christopher! But never give a check directly to the seller, nor take one from the seller. As Derek said, your closing attorney (or title company) handles all checks.  Buyers get to choose which title company/attorney closes the deal. Get to know the people in your title company (or attorney's office). They're members of your team!

Brandon McCombs · Answer

Definitely get in writing the deposit amounts from the landlord and I would request the tenants individually sign the document indicating they agree on the amounts.

I say this because I bought a multi-unit building a couple years ago. There were 4 tenants in it at the day of closing. We got their deposits transferred to us and the owner had written out what was owed per each tenant. We also got copies of their leases. One tenant hadn't paid a deposit though so there wasn't anything transferred to us for her. I had looked at her lease and it stated she was supposed to have paid it but apparently never had prior to moving in.

Months down the line the topic comes up in conversation between myself and the tenant. She claimed she had paid the deposit; the previous owner had a different story and said that he had let her move in w/o paying one and never pursued it very hard after she moved in. Luckily she didn't take it up with me any more and went after the previous owner. But she could have easily made matters worse for me. But she knew the previous owner was an ***hole just like I knew he was and therefore knew there was a better chance he would be lying rather than me.

Christine Kankowski · Answer

Yes, get it in writing. ALso see if they have move in inspections so you know what the condition of the property was when the tenants first rented it, or else, how can you hold them accountable for any damage?

Mindy Jensen · Answer

@Christopher Leday , this is something you want to make absolutely sure transfers to you at closing - unless the units will be vacant at closing.

The security deposit belongs to the tenants, not the landlord - but the landlord holds on to it and has access to it should the tenant damage the property.

Also, the seller typically chooses the title company - you have to specifically request the title company as a buyer if you wish to choose it, and typically you are on the hook for what is usually the seller's portion of the title work if you choose the company.

Does tenants deposit transfer to new owner?

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