Current tenants didn't pay security deposit
Hello, I am about to purchase my first 2-unit investment property. It was owned by a woman who rented the units to family members and never collected a security deposit, so there is technically not a deposit that will be transferred to me as the new owner. What are some ideas for collecting those security deposits to protect myself, since I am not comfortable with not having that in place in case the tenants suddenly cause damage? No sales contract has officially been signed yet, we are still agreeing to the terms. I will be financing the property with a mortgage. Thanks in advance!
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#2 General Landlording & Rental Properties Contributor
You can not force inherited tenants to pay a deposit. You can ask but it is up to them if they choose to pay.
You do not likely want tenants that are family of the previous owner. I would prefer the seller give notice to the tenants and provide vacant closing. I would then find my own tenants and collect first, last, deposit whatever the state code allows.