Both parties are bound to the lease terms, regardless of the fact that now the landlord is facing foreclosure. So the owner cannot keep the deposit for rental payments unless you have defaulted on paying rent. The landlord must refund the security deposit minus for any damages caused beyond ordinary wear and tear. The owner cannot come into the property and remove anything from the premises before you vacate. Doing so is a breach of the landlord's lease agreement. At this time, the landlord has breach the terms of the lease in failing to provide habitable property, you have grounds to sue the landlord for the breach of the lease and can seek compensation for any costs associated in having to prematurely relocate.


http://www.keytlaw.com/azrealestate/tenantforeclosure.htm

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