You should not lose your security deposit or last month's rent payment if the property is sold or foreclosed or if a new management company takes over.
Your landlord should forward your security deposit and last month’s rent to the new owner. But keep track of who the new owner is. If your landlord loses the property to foreclosure, the bank may be the new owner, or a new owner may buy the property.
The new landlord has 45 days to send you a notice about your security deposit, last month’s rent, and interest owed.
If the new landlord does not send you this notice by the deadline, the old landlord must return your deposit, plus interest.48
If 45 days pass and you have not heard from the new landlord, write to the old landlord to demand she return your money, plus interest.49 See Security Deposit Demand Letter for Tenants Moving Out (Form 6). If the old landlord does not return your money, you can sue her for 3 times the amount she owes you.50
If the new landlord asks you to pay another security deposit or last month’s rent – Say, “No!”
Then send a letter to the new owner that says:
- You already paid the previous landlord, and
- The landlord was supposed to transfer all security deposits, payments for last month’s rent, and interest to the new owner.
Under the law, a tenant 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.51 In most cases, the new owner is responsible for your security deposit, last month’s rent, and interest, even if she never received it from the old landlord.52
When you move out, the new owner must pay you. Or she can let you live rent-free for the time that represents the money she owes you.53
If your old landlord lost the property to foreclosure and the new owner does not return the money you are owed, you may have to go to court to get it back. See Tenants and Foreclosure
For more information about security deposits and foreclosures, see Chapter 18: Tenants and Foreclosure – How to Get Your Security Deposit Back After Foreclosure.
51 . 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).
52 . Government agencies that take over properties for back taxes may not be responsible for the amount of the security deposit. Some banks may not be responsible while in the process of foreclosing, but may become responsible if they transfer title to themselves. G.L. c. 186, § 15B(5).
53 . 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.