What are a tenant’s rights to the return of their security deposit after foreclosure?

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What are a tenant’s rights to the return of their security deposit after foreclosure?

My rental was officially foreclosed on 3 1/2 months ago. The landlord notified me maybe a week before that this would be happening. When I went to talk to her about the return of the security deposit, she wanted to start playing “Let’s make a deal” and saying “Oh well there was oil in the tank that you used, etc.” Her husband got very nasty with me saying how I didn’t have to pay rent to the bank, etc, and how he wanted to do a walk through first. Are they obligated to return it to me? Since I paid full month but they lost ownership mid-month do they owe me 1/2 month rent.

Asked on July 3, 2011 under Real Estate Law, New York

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You are indeed entitled to a return of your security deposit. What arrangement you make with the bank as no bearing on this. Frankly, it's none of your landlords' business. As for the 1/2 month rent, you are also entitled to a refund. They were not the legal owners as of the middle of the month. However, from the sound of things you are going to have to take legal action to get your landlord's do the right thing. In a case such as this you will more than likely need to file suit in small claims court. If you do be sure to bring all documentation with you - a copy of your lease, foreclosure notices that you received, can celled checks, etc.

On the other hand, if you inform your landlord that you will sue to obtain your rightful refunds, then they may just give these monies back to you. Perhaps at this point they have had their share of the legal system. Good luck.


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