When a property is sold, the security deposit still belongs to the tenant. However, states have different rules regarding how the security deposit is handled during the sale.
Typically, state law requires that the security deposit be transferred to the new owner so the deposit can be used or returned to the tenant at the end of the lease term. In some states, buyers and sellers also have the option of returning the security deposit to the tenant at the time the property is sold, less any allowable deductions.
Depending on the state, there may be specific obligations during the sale. For example, landlords in California must provide the new owner with a written statement that includes the amount of each security deposit (after deductions), an itemized list of any deductions made, and whether the deposit was transferred or returned to the tenant.
Alabama Security Deposits Upon Property Sale
When a property is sold in Alabama, the seller must transfer the security deposit to the new owner.
Alaska Security Deposits Upon Property Sale
When a property is sold in Alaska, the seller must transfer the security deposit to the new owner.
Arizona Security Deposits Upon Property Sale
When a property is sold in Arizona, the seller must transfer the security deposit to the new owner.
Arkansas Security Deposits Upon Property Sale
When a property is sold in Arkansas, the seller must transfer the security deposit to the new owner.
California Security Deposits Upon Property Sale
When a property is sold in California, the seller must either transfer the security deposit to the new owner or return it to the tenant minus any allowable deductions.
Prior to the sale, the seller must provide the new owner with a written statement that includes the amount of the deposits (after deductions), itemized deductions, and whether the deposits were transferred or returned to the tenants.
Colorado Security Deposits Upon Property Sale
When a property is sold in Colorado, the seller must either transfer the security deposit to the new owner and notify the tenant in writing of the new owner’s name and address or return it to the tenant. Before returning or transferring the deposit, the seller can make any allowable deductions first.
Connecticut Security Deposits Upon Property Sale
When a property is sold in Connecticut, the seller must transfer the security deposit with interest to the new owner. Within 30 days of receiving the security deposit, the new owner must send written notice to the tenant including the amount held and the name and address of the financial institution.
Delaware Security Deposits Upon Property Sale
Delaware law does not regulate the handling of a security deposit when a property is sold. However, the landlord in possession of the security deposit must handle it according to all applicable rules.
Florida Security Deposits Upon Property Sale
When a property is sold in Florida, the seller must transfer the security deposit along with a written record of the amount to the new owner.
Georgia Security Deposits Upon Property Sale
Georgia law does not regulate the handling of a security deposit when a property is sold. However, the landlord in possession of the security deposit must handle it according to all applicable rules.
Hawaii Security Deposits Upon Property Sale
When a property is sold in Hawaii, the seller must transfer the security deposit along with a written accounting to the new owner. Within 20 days after the seller provides the written accounting, the buyer must send written notice to each tenant of the amount transferred.
Idaho Security Deposits Upon Property Sale
When a property is sold in Idaho, the seller must transfer the security deposit to the new owner.
Illinois Security Deposits Upon Property Sale
When a property is sold in Illinois, the seller must transfer the security deposit to the new owner and provide the name, address, and deposit amount of each tenant. Within 21 days after the transfer, the new owner must post a written notice on the main entrance of each unit stating that the new owner has received the deposits.
Indiana Security Deposits Upon Property Sale
When a property is sold in Indiana, the seller must transfer the security deposit to the new owner and notify the tenants in writing.
Iowa Security Deposits Upon Property Sale
When a property is sold in Iowa, the seller must either transfer the security deposit to the new owner and notify the tenant in writing or return the security deposit to the tenant. In either case, the seller can make any allowable deductions first, but they must notify the tenant in writing of the amount transferred after deductions and the new owner’s name and address.
The notice must include a stamped envelope addressed to the new owner. If the tenant does not object to the amount within 20 days, the new owner is only liable to the tenant for the amount transferred.
Kansas Security Deposits Upon Property Sale
When a property is sold in Kansas, the seller must transfer the security deposit to the new owner. If the rental unit is a mobile home, the seller has additional responsibilities including sending written notice to each tenant.
Kentucky Security Deposits Upon Property Sale
When a property is sold in Kentucky, the seller must transfer the security deposit to the new owner and send written notice to the tenant.
Louisiana Security Deposits Upon Property Sale
When a property is sold in Louisiana, the seller must transfer the security deposit to the new owner.
Maine Security Deposits Upon Property Sale
When a property is sold in Maine, the seller must either transfer the security deposit to the new owner or return it to the tenant less any allowable deductions.
If the seller chooses to transfer the security deposit, it must occur prior to closing. They must also notify each tenant by mail of the amount transferred, an accounting of the deposit with any deductions, and the buyer’s name and address.
Maryland Security Deposits Upon Property Sale
When a property is sold in Maryland, the seller must transfer the security deposit to the new owner with a written notice containing the amount and date of the deposit, records of the applicable interest rates, and the name and address of the tenant.
Massachusetts Security Deposits Upon Property Sale
When a property is sold in Massachusetts, the seller must transfer the security deposit with interest to the new owner. Within 45 days of receiving the deposit, the new owner must notify the tenant in writing of the date the deposit was received and the name, business address, and telephone number of the new owner or their agent.
Michigan Security Deposits Upon Property Sale
When a property is sold in Michigan, the seller must transfer the security deposit to the new owner or return it to the tenant. If the security deposit is transferred to the new owner, they must notify the tenant in writing of their name and address.
Minnesota Security Deposits Upon Property Sale
When a property is sold in Minnesota, the seller must either transfer the security deposit with interest to the new owner or return it to the tenant minus any allowable deductions.
If the seller chooses to transfer the security deposit to the new owner, they must notify the tenant in writing. The notice must include a postage-paid envelope addressed to the new owner. If the tenant does not object to the amount within 20 days, the buyer is only liable to the tenant for the amount transferred.
Mississippi Security Deposits Upon Property Sale
Mississippi law does not regulate the handling of a security deposit when a property is sold. However, the landlord in possession of the security deposit must handle it according to all applicable rules.
Missouri Security Deposits Upon Property Sale
Missouri law does not regulate the handling of a security deposit when a property is sold. However, the landlord in possession of the security deposit must handle it according to all applicable rules.
Montana Security Deposits Upon Property Sale
When a property is sold in Montana, the seller must transfer the security deposit to the new owner.
Nebraska Security Deposits Upon Property Sale
When a property is sold in Nebraska, the seller must transfer the security deposit to the new owner.
Nevada Security Deposits Upon Property Sale
When a property is sold in Nebraska, the seller must either return the security deposit to the tenant and notify the new owner in writing, or transfer the security deposit to the new owner and notify the tenant in writing of the buyer’s name, address, and phone number.
The return or transfer of the security deposit must occur prior to the recording of the deed.
New Hampshire Security Deposits Upon Property Sale
When a property is sold in New Hampshire, the seller must transfer the security deposit to the new owner and notify the tenant in writing by registered or certified mail of the name and address of the buyer.
New Jersey Security Deposits Upon Property Sale
When a property is sold in New Jersey, the seller must transfer the security deposit to the new owner and notify the tenant by registered or certified mail of the name and address of the person that assumed responsibility for the deposit.
The transfer must occur within 5 days after the sale of the property.
New Mexico Security Deposits Upon Property Sale
When a property is sold in New Mexico, the seller must transfer the security deposit to the new owner and notify the tenant in writing.
New York Security Deposits Upon Property Sale
When a property is sold in New York, the seller must transfer the security deposit to the new owner and notify the tenants by certified mail of the name and address of the new owner.
The transfer must occur within 5 days after the sale of the property.
North Carolina Security Deposits Upon Property Sale
When a property is sold in North Carolina, the seller must transfer the security deposit to the new owner and notify the tenant by mail of the buyer’s name and address or return the deposit to the tenant. In either situation, the seller can make any allowable deductions first.
The return or transfer of the security deposit must occur within 30 days after the sale.
North Dakota Security Deposits Upon Property Sale
When a property is sold in North Dakota, the seller must transfer the security deposit with interest (if any) to the new owner.
Ohio Security Deposits Upon Property Sale
Ohio law does not regulate the handling of a security deposit when a property is sold. However, the landlord in possession of the security deposit must handle it according to all applicable rules.
Oklahoma Security Deposits Upon Property Sale
When a property is sold in Oklahoma, the seller must either return the security deposit to the tenant or transfer the deposit to the new owner and notify the tenant in writing of the owner’s name and address.
Oregon Security Deposits Upon Property Sale
When a property is sold in Oregon, the seller must transfer the security deposit to the new owner.
Pennsylvania Security Deposits Upon Property Sale
When a property is sold in Pennsylvania, the seller must transfer the security deposit to the new owner.
Rhode Island Security Deposits Upon Property Sale
When a property is sold in Rhode Island, the seller must transfer the security deposit to the new owner.
South Carolina Security Deposits Upon Property Sale
When a property is sold in South Carolina, the seller must transfer the security deposit to the new owner and notify the tenant in writing.
South Dakota Security Deposits Upon Property Sale
South Dakota law does not regulate the handling of a security deposit when a property is sold. However, the landlord in possession of the security deposit must handle it according to all applicable rules.
Tennessee Security Deposits Upon Property Sale
When a property is sold in Tennessee, the seller must transfer the security deposit to the new owner and notify the tenant in writing.
Texas Security Deposits Upon Property Sale
When a property is sold in Texas, the seller must transfer the security deposit to the new owner and notify the tenant in writing of the amount transferred and a statement that a new owner has received and assumed responsibility for the deposit.
Utah Security Deposits Upon Property Sale
When a property is sold in Utah, the seller must transfer the security deposit to the new owner.
Vermont Security Deposits Upon Property Sale
When a property is sold in Vermont, the seller must transfer the security deposit to the new owner. The new landlord must notify each tenant in writing of their name and address with a statement that they received the deposit.
Virginia Security Deposits Upon Property Sale
When a property is sold in Virginia, the seller must transfer the security deposit to the new owner. If there is a property management company, they must send a written notice to each tenant after the security deposits are transferred.
Washington Security Deposits Upon Property Sale
When a property is sold in Washington, the seller must transfer the security deposit to a qualifying financial account controlled by the new owner and notify the tenant of the name and address of the financial institution.
Washington D.C. Security Deposits Upon Property Sale
When a property is sold in Washington D.C., the seller must transfer the security deposit to the new owner.
West Virginia Security Deposits Upon Property Sale
When a property is sold in West Virginia, the seller must transfer the security deposit to the new owner.
Wisconsin Security Deposits Upon Property Sale
When a property is sold in Wisconsin, the seller must either return the deposit to the tenant and notify the new owner or transfer the deposit to the new owner and notify the tenant of their name and address.
Wyoming Security Deposits Upon Property Sale
When a property is sold in Wyoming, the seller must transfer the security deposit to the new owner.
