Inheriting lease of section 8 tenant

[Mary Osborne]

Hello,

I am under contract on my first duplex (yay!) and am inheriting two leases.  One of the leases is section 8.  At settlement the seller is transferring the security deposit on one of the units to us but not the section 8 unit because she said that money belongs to hud.  Is this correct?  It does not sound right to me because what if something happens to the unit while I am the owner.  Thank you in advance for your help. 

Side note: I do plan on singing a new lease with the tenant a month following our purchase.