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Richard
Richard, Attorney
Category: Estate Law
Satisfied Customers: 53972
Experience:  29 years of experience practicing law, including tax and estate planning.
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When you sell a house with tenants who assumes the deposit refund the buyer or seller?

Customer Question

when you sell a house with tenants who assumes the deposit refund the buyer or seller?
Submitted: 1 year ago.
Category: Estate Law
Expert:  Richard replied 1 year ago.
Hi! My name is ***** ***** I look forward to helping you!
The new owner steps into the shoes of the old owner. On the closing of the sale, the new owner should get credit from the old owner for any deposit posted by the tenant. From the tenant's perspective, if the tenant leaves and the new owner won't return the deposit because the new owner states he didn't receive it at closing, the tenant would file suit naming both the new owner and the old owner as defendants.
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Customer: replied 1 year ago.
One more thing - If my tenant purchases the house and never technically moves out do I need to return their deposit? This is entirely different from the 1st question
Expert:  Richard replied 1 year ago.
This would be subject to your agreement with the tenant on the purchase of the property. If your agreement is silent, then the tenant would be entitled to a return of the deposit upon purchase because it was posted to insure against unpaid rent and damages. But, if the tenant caused damage to the house which caused you to have to sell it to him for a reduced price or the tenant is requiring you to make repairs, then you could apply the deposit to that damage.