Transfer Of Security Deposit To New Owner: Fill & Download for Free

Nothing happens to your original lease* and your security deposit.Your tenancy remains unchanged; only the party named as “Landlord” or “Owner” under your lease changes.Do not pay rent to anyone until you receive one of these:notice from your original landlord directing you to pay the rent to another party as of a specific date, ORdocumentation from the new owner showing that title of the property has been transferred to them as of a specific date.If you are not sure who is the rightful owner, open a bank account titled “Rent Escrow Account” and transfer your rent each month into that account.Then inform both parties, in writing, that you have established an escrow account for your rent which will be turned over to whomever emerges as the rightful owner.*If the lease contains a “subordination” clause then the lease is subject to the lender’s interest and its right of foreclosure. In that case, the lender would have the right to terminate the lease upon foreclosure, but the security deposit must still be returned.

Nothing. Upon a sale or transfer of title to a rental property, the new owner will be responsible for returning any security deposits paid by existing tenants to the previous owner. The new owner assumes the landlord position under the existing leases, and therefore assumes liability for return of security deposits paid under those leases.

This happened to me as a tenant once in California, and as the landowner inheriting foreclosed-upon tenants in Maryland, so I’ve seen both sides.In the case where I was a tenant I made arrangements with the owner, who paid me a sum to move out before the end of my lease, as this helped the property sell. The understanding I have is that the lease, including the security deposit, transfer to the new owner, who then bears responsibility for the lease terms, including the return of the deposit. Whether or not the new owner actually receives the deposit money from the original owner, responsibility for a lease follows the title.Again, from my understanding, it is not possible for there to not be a new owner. It will either be the purchaser of the foreclosed property, the bank if no one buys it, or the government if back taxes are owed and the bank decides not to cover them. One of these three entities will be responsible for your lease terms.What I would do in your situation is the following:Carefully document the state of the home now, to guard yourself against a new owner who attempts to place repairs unrelated to your tenancy against you. There are bound to be some issues in a foreclosing property, but these are presumably because of the insolvency of the landlord, and not your behavior as a tenant.Continue making rent payments to your landlord up until the date of the foreclosure. Doing otherwise voids your lease, and your lease is actually very valuable at the moment (unless you are on month-to-month).Once the foreclosure occurs (you are required to be provided notice of this date, presumably by a notice on your door), pay yourself your rent check into a separate account. This money belongs to the new owner, but there will be some time before that person is established to your satisfaction. I would personally check with the county records office to obtain the name and contact of the person directly before agreeing to transfer any money.Negotiate with the new landlord for termination of your lease. They are likely to want you gone so they can perform updates, maintenance, or the like to the home. Removing a tenant is a pain, as you have rights to be there that can only be terminated through written intent to not renew the lease or a complicated eviction process.Check with a lawyer. Not an expensive one, but tenant protections can differ down to the city/township level, so get someone who is familiar with the law to offer tailored advice.