Accounting for Exiating Tenant's Security Deposit
When buying a property that comes with tenants, how should the security deposit be moved from the seller to the buyer?
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In Michigan, the security deposit is the tenant's property until they move out and a notice of damages is provided to the tenant showing the disposition of the security deposit. The purchase agreement should have an assignment clause in it to assign the deposit to the new owner at close. (If not, you've just given the seller a bonus, and you'll be stuck with returning the deposit to your tenant(s) out of your own pocket.)