Security deposit

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Security deposit

We just sold a building with a commercial space and 2 upper apts. One of the apt tenants owes back rent. The new owner is not going to renew the expiring lease on this tenant. Are we able to keep the security deposit or does that pass to the new owner of the building?

Asked on May 31, 2009 under Real Estate Law, Michigan

Answers:

B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

You need to check on this with your attorney.  If you don't have one, there are places you can find a lawyer, including http://goallineblitz.com/game/player.pl?player_id=947160

I'm not a Michigan lawyer.  Many states have laws that deal with your situation, in more or less detail, and they vary from one state to another.  Depending on all the facts -- which you need to discuss with the attorney who handled your side of the building sale, ideally -- you will probably have to turn the money over to the new landlord, with notice to the tenant;  if there is a way to charge the unpaid rent against that deposit, be sure to have your lawyer explain how to document that to the tenant.


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