Inherited Tenant Security Deposit

8 Replies

So I'm near closing for this duplex that I am planning on house hacking and will be inheriting tenants on the other side. My RE agent just informed me that he doesn't know if the seller will be providing the Security Deposit, or if I have to fork that up.

I assumed that it was supposed to be handed over, I'm not sure where I drew that conclusion though. I check the contract and couldn't find anything on security deposits. If it isn't on the contract, would I have to front the security deposit when the tenant turns over? 

In NYS, the seller, by law, has to turn over security deposits to the new owner. Check your states landlord tenant laws. If it’s there, your seller has a legal obligation. 

Your RE agent doesn't know? lol Save that email for your claim against your broker.

The lease and security deposit should be assigned to the new buyer at closing. You should already know the lease terms and deposit amount if you were properly represented.

security deposits and prorated rent are something that your agent should have stipulated in your written offer. if he did not, then seller has no obligation to give it to you. sounds like you should use a new agent next time.

Your esstopal letter should indicate all tenant/landlord conditions of the existing tenancy. If your lawyer did not make sure you were protect on a simple real estate transaction he is incompetent.

If it is not in th econtract you are sol.

Originally posted by @Thomas S. :

Your esstopal letter should indicate all tenant/landlord conditions of the existing tenancy. If your lawyer did not make sure you were protect on a simple real estate transaction he is incompetent.

If it is not in th econtract you are sol.

The "S." in "Thomas S." stands for Sugarcoat. 

I think this transaction and the agent's reputation can still be saved by demanding an assignment of the lease and an adjustment line item for the security deposit $ on the settlement statement. I would refuse to settle without this.

It needs to be handed over and documented at closing in the Settlement Statement HUD-1. I had previous experience with this as well. Make sure the seller doesn't have any other deposits/1st months rent that they should be transferring as well.

The security deposit and pre paid rents should be transferred to the buyer at settlement and should be on the ALTA closing documents. Figure this out BEFORE closing. If they are really not going to transfer it over then you should negotiate for a price reduction of equal amount.

Thanks guys. I just talked to my RE agent, and he's going to see what he can do. I'm making it adamant that we need this sorted out before closing, which is in a couple weeks.  

I've found the seller disclosure, but it just states that they have the security deposits (and they didn't specify the amount, just says "see lease"), I haven't found anything on having them fork it over to me at closing. 

They just sent me a copy of their lease, and it's just a mess through this whole process. On the lease, it doesn't have a start or end date, and one of the leases isn't a even for the correct year. I'm just ranting now, but thanks again guys for clarifying. 

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