seller not handing over last months rent (deposit)

6 Replies

So, I purchased my first rental property around this time last year with my parents as part owners. It was in the middle of a 1 year lease with the tenants. In Canada we aren't allowed legally to take a deposit for potential damages, instead we take first and last months rent ahead of every lease . After a few phone calls between the previous owner and my mother it appears she is clearly avoiding to hand over last months rent. Apparently she at first said she didn't take last months rent from the tenants, then eventually went on to say she gave last months rent to her lawyer who we couldn't reach until this month who eventually said he hadn't received it. The tenants lease ended in April of 2018 and they said they paid the owner last months rent which was $1700. My mom is giving up on trying to go after it, but I feel its not right. Is it too late to go after her(previous owner) in court? Should I just forget about it? Im aware its our fault for not collecting last months rent when they handed over the property. What are my options here?

I had this happen ~ sort of~but I bought it at a discount and knew I’d be on the hook for the deposits ( triplex)
Basically at the closing I signed an affidavit that stated I knew after the successful closing that once I took ownership I’d be responsible for them . In Pennsylvania where I live the seller is required to hand over any and all the deposits from the tenants to the new owner to hold . The deposits are not landlords . Being the prior owner kept the deposits the tenants may need to go after the owner to recover their money . Tough situation

You should have got this at closing.  Is it document in tenants lease that the landlord had the deposit?  Any other paper trail?  Otherwise you’re likely SOL.

Originally posted by @Dick Stevens :

You should have got this at closing.  Is it document in tenants lease that the landlord had the deposit?  Any other paper trail?  Otherwise you’re likely SOL.

 There is documentation that shows tenants paid first and last to the previous owner

You should have used an estoppel letter to confirm what was paid. Then put in writing exactly what transfers to you at closing. If it's part of the written contract, the title company can withhold the funds from sale proceeds.

Now that you've already closed, your likely option is to sue in court. If you have proof the last month was paid and further proof that it was never transferred to you at closing, you should have a good case.

Wow another story in Ontario were you did not receive the security deposit at closing. Misrepresentation by your realtor. Lawyer can be blamed as well. This saddens me. Didnt anybody know this is a rental property?

Check your statement of adjustments. You got credit for it at purchase.

Also, it’s not “Canada” that doesn’t allow damage deposits, it’s the exceptionally tenant friendly / landlord biased province you’ve invested in.