Advice on a Complex Eviction & Security Deposit

[Hyejin L.]

Let's start with the good news. First, this is my first post on BiggerPockets, even though I've been an avid reader and podcast listener for more than a year. Second, my partner and I recently purchased our first rental property a few months ago (!) 

Now on to the bad news.  The rental property we purchased (a duplex in Durham, NC) has come with it's fair share of "learning opportunities" shall we say. The biggest challenge we've faced is that we inherited a tenant who was delinquent on her rent with the previous owners, and now owes us as well.

Here's where it gets complicated. 

The previous owners filed an eviction 2 weeks after we closed on the property for the rent that was owed to them while they still owed the property (~1.5 month back rent). The previous owners went to court, won the judgement, and we are now waiting for the sheriff to do the lock-out. As an aside, the lockout keeps getting delayed because the holidays and now the weather. Although we did not technically file the eviction, now we facing the consequences of not being able to rent out the property until this tenant moves out. (We learned a big lesson here!) 

My question is about the security deposit. Who gets to keep the security deposit? I know that in North Carolina you are permitted to use security deposit towards unpaid rent. But who gets first right? Do we keep it since we're the new owners? Or do the prior owners get first right, since they filed the eviction? Both of us are technically owed money. When we purchased the property, the security deposit was transferred to us so it's currently in our bank. The tenant owes us ~2 months back rent (since she has stopped paying since she's under judgement). 

I know we should probably contact a lawyer, but thought I'd see if anyone in the BP community has any experience with this. Thanks in advance for the help! 

[Adam Schneider]

@Hyejin L. -- why wasn't the security deposit transferred to you at closing? You might want to check your HUD (if you bought with cash) or Buyer CD (if you used a bank loan) to see if that was accounted for. I've never heard of a judge ordering to evict a tenant who is not the tenant of the complainant. If you are a member of TAA (Triangle Apartment Association), you might want to reach out to them for advice. If not, I'd to the attorney route as you mentioned...