If a new landlord buys your building, your landlord goes bankrupt, a bank forecloses on the property you rent, or a new building management company takes over, you should not lose your security deposit or last month's rent payment. It is vital that you do your homework when there is any change in ownership or control of your building.
In many cases, tenants routinely lose track of their deposits when the property changes hands. It's not hard to see why. As a tenant, you are most likely to think about your deposit when you are getting ready to move out. If at that point your new landlord denies having received the deposit from the old landlord, you will probably have a difficult time proving that she did receive your money.
Under the law, you cannot be made to pay a new or additional security deposit or last month's rent payment because someone else has taken over the building.27 The old landlord or manager is required to transfer all last month's rent payments a nd security deposits, with their interest, to the next owner. The next owner then becomes fully responsible for the deposits and must notify you within 45 days that she has them. Until the new landlord gives you this notice in writing or returns the deposits to you, the old landlord remains financially responsible for your deposits.28
If you do not receive this written notice from the new landlord within 45 days of her taking ownership of the building, you should promptly demand in writing that the old landlord refund your money. She must comply.29 If you have to sue the old landlord for your deposits, you can sue her for triple the amount that she owes you.30
Meanwhile, the new landlord—except some foreclosing banks or a government agency that takes over property for back taxes—is still responsible to you for the amount of your deposit, even if the new landlord never actually received it from the old landlord. The new landlord can satisfy this obligation by letting you have free rent for the time period represented by the deposits.31 You can also sue the new landlord for the return of the basic deposit, assuming you can still prove you paid it to the former landlord. The law, however, does not allow you to sue the new landlord for treble damages.
For more information about security deposits and foreclosures, see the section called Getting Your Security Deposit Back After Foreclosure in Chapter 21: Tenants Facing Foreclosure
Endnotes
27 G.L. c. 186, §15B(1)(d). See Mall Apartments Realty Trust v. Hilda Hernandez, Hampden Housing Court, 91-SC-1865, p. 3 (March 16, 1992), where the court found that security deposit law did not insulate purchaser at foreclosure sale from liability for deposits. See also Cruz v. Cabrera, Northeast Housing Court, 92-SC-00074, p. 4 (Sept. 25, 1992), where court found buyer at foreclosure sale liable to tenants for the return of security deposit and awarded tenant treble damages, plus court costs (credited against unpaid rent).
28 G.L. c. 186, §15B(5), (7A).
30 G.L. c. 186, §15B(7). See Castenholz v. Caira, 21 Mass. App. Ct. 758, 764 (1986).
31 G.L. c. 186, §15B(5) (last paragraph), (7A) (last paragraph). In Vinton v. Demetrion, 19 Mass. App. Ct. 948, 949 (1985) (rescript), the court affirmed that the new landlords could be liable to the tenants for damages even though they took ownership of the property shortly after the tenants had been evicted. The decision does not address their liability for treble damages claimed by the plaintiffs.
Produced by Maureen McDonagh Created July 2008
