What Happens to Your Deposit If Your Landlord Sells the Property?

A sale does not end your right to your deposit. California, Florida, Massachusetts, New Jersey, New York, and Washington require the seller to pass the deposit to the new owner, who then owes it to you under the same rules, and California also lets the seller refund it to you instead. If the seller keeps the money, Massachusetts, New Jersey, and Texas still make the buyer responsible for it, and California and New York do with the exceptions explained below. After a foreclosure, the federal law that protects tenants says nothing about deposits, so your state's law decides who owes you.

Who owes your deposit after a sale?

New York's knowledge rule. A buyer that never received your deposit still owes it if it knew about it. The law treats the buyer as knowing when a lease in effect at closing mentions the deposit, when the deposit was placed in a bank account in the 6 months before closing, or when you send proof. A buyer with no record of your deposit must tell you so in writing within 30 days after closing, and you then have 30 days to send a canceled check, a receipt from the landlord, or a lease signed by a prior owner, or you lose your claim against the buyer. If the buyer never sends that notice, you can send proof at any time. For a rent-stabilized apartment, this rule covers leases and renewals signed on or after November 15, 2025; under an earlier rent-stabilized lease, the buyer owes your deposit whether or not it received it.

For deposit caps, interest, and return deadlines, see our overview of state security deposit laws.

What changes if the building is foreclosed?

Foreclosure is the lender's legal process for taking a property after the owner stops paying the mortgage. The federal Protecting Tenants at Foreclosure Act requires the new owner to give you at least 90 days' notice to leave and to let you finish a lease signed before the foreclosure, unless it sells your unit to a buyer who will live there. It protects bona fide tenants: you are not the borrower or the borrower's spouse, child, or parent, the lease was an ordinary deal between independent parties, and the rent is not far below market unless a subsidy lowers it. The act does not mention deposits, so state law decides who owes yours:

• Washington: if your deposit is not transferred to the new owner after a foreclosure sale, the owner who lost the property must refund the full deposit to you right after the sale. If it does neither, it can owe you up to twice the deposit, and the winner of a lawsuit over it recovers court costs and attorney's fees.
• Texas: the rule that makes a new owner liable does not apply to a mortgage lender that takes title through foreclosure, so your claim stays with your former landlord.
• Massachusetts: a foreclosing bank or other financial institution chartered by Massachusetts or the United States does not owe a deposit the former owner never transferred, so your former landlord still owes it. Your landlord had to keep the deposit in a separate Massachusetts bank account protected from its creditors, including a foreclosing lender, and the receipt it owed you within 30 days of taking the deposit names that bank and the account number.
• New Jersey: the buyer at a foreclosure sale owes your deposit and interest whether or not the former owner turned them over.
• New York: the former owner must turn your deposit over to the receiver (a person the court puts in charge of the building) within 5 days after the receiver takes over, or, if there is none, to the foreclosure buyer within 5 days after the deed is delivered, and tell you by registered or certified mail who holds it. Until it does, the former owner stays liable to you.

For the 90-day notice and when a new owner can end your lease, see our guide to your rights when a rental is sold or foreclosed.

What should you get in writing from the old and new owners?

1. From the seller, before closing: the amount it holds for you, any interest owed, any deductions it plans to take, and whether it will transfer the deposit or refund it. Before a voluntary sale in California, the seller must give the buyer a written statement of your remaining deposit and any deductions, so ask for a copy.
2. From the seller, after closing: the transfer notice your state requires. California's comes in person or by first-class mail and lists any claims against the deposit, the amount, and the buyer's names, addresses, and phone numbers; if it is handed to you, you sign the landlord's copy, so keep a photo of it. New York's and New Jersey's come by registered or certified mail with the buyer's name and address.
3. From the buyer: a written statement that it holds your deposit and the exact amount. Texas requires the new owner to give you a signed statement, and Massachusetts requires written notice within 45 days of the transfer with names, business addresses, and business phone numbers. New Jersey requires notice within 30 days naming the bank, account type, interest rate, and amount, and Washington requires prompt notice of the bank or escrow agent now holding the deposit.
4. Check the figures. Compare the buyer's amount with your lease, deposit receipt, and canceled check or bank record, and dispute any difference in writing right away. Our guide to security deposit receipts covers the receipt and bank details a landlord may owe you.
5. Do not pay a second deposit to cover the seller's failure. In California, a buyer cannot demand a replacement deposit until it refunds your original deposit or gives you an itemized statement of it, and in Massachusetts no new owner may demand more than the one month's rent the law allows.
6. If neither owner will confirm the deposit, send both a written demand that names your state's rule. If no refund comes after you move out, you can sue the owner your state makes liable, or both; our guide to what to do when your landlord won't return your deposit covers the demand letter and small claims court.