What Happens to the Security Deposit If You Sell Your Property? | McGrath Management LLC

If an investment property is sold or otherwise changes ownership, the landlord must do two things within five days of the transfer of ownership.

  1. Transfer all security deposits over to the new owner.
  2. Notify all tenants whom he or she has received a security deposit from, in writing, by certified or registered mail, of the change in ownership. In this written notice, the landlord must provide the tenant with:
  • The Name of the New Owner/Owners.
  • The Address of the New Owner/Owners.

Different rules may apply if a property has been foreclosed on, so you should seek legal counsel if your property has been foreclosed on or if you are buying a foreclosure to determine the appropriate actions.

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