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Posted by
H Lu

If I bought a rental property, security deposit is not list as credit on HUD . Am I still be able to get the money back

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If I bought a rental property, security deposit is not list as credit on HUD . Am I still be able to get the money back

By H Lu   
Posted on Nov 02, 2017 in Topic: Home Buying
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  • Thanks everyone . Unfortunately the close agent failed to put tenant’s deposit on the settlement sheet when we closed. The seller is trying to hold the money not returning. I want to know if go to the court is the only way to get my deposit back or you knew other ways to get it back. Thanks.
    about 2 days ago
Status: Open
Viewed: 312
Asked by: Consumer
Posted: 3 weeks ago
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Silver
Michael Jobin
about 3 weeks ago
Hi H Lu,

We need to make sure you are talking apples to apples. In a purchase, you have Earnest Money and not a Security Deposit. When I hear Security Deposit, I think of the renter money, not the buyers money ("Am I still be able to get the money back"). If you indeed mean Earnest Money, then you would be able to get back your money only under specific instances. If you fail to hold up your end of the legal contract, then the seller is entitled to keep the Earnest Money. If the seller fails to hold up their side of the contract, then you would get the money back.

Since this is a rental property you are looking at buying, and we assume you are talking about the Security Deposits the renters have made to the current owner, then they would transfer to you as the new owner at closing, based on the lease agreements made.

Since it belongs to the tenant, escrow deducts it from the seller's settlement and transfers it to the new owner. This is true for security deposit, last month rent, and other collected fees.

My best suggestion is to make sure a real estate attorney looks at your contract before you sign.

I hope this helps.

Michael Jobin, SRES
C&K Properties
713.545.2314
MJobin@Jobee.com


about 3 weeks ago
Bronze
Purvi Shah
about 2 weeks ago
Security deposit is amount paid by renter to the landlord which is usually one month rent. If you purchased a rental property, which works same way like purchasing a house (unless is multi unit property), you would have paid earnest money (deposit given seller when purchase contract submitted). Whether you can get earnest money back or not, depends on the terms of the executed purchase contract.


about 2 weeks ago
Diamond
Darby Grimmett
about 2 weeks ago
Good afternoon,

I think the previous responses are confused about what you are asking. To answer you question, yes, if you are purchasing a Property that is Tenant occupied at the time of purchase, the Security Deposit that the current Tenant paid to the current LL should be credited to you at closing. Because you are the new owner of the Property, and thus the new LL to the Tenant, you'll be responsible for the Security Deposit at the end of the lease term so you should definitely ensure you receive this at closing. You should also receive prorated rent.

Please note that you are taking over the exact lease that is in place. You should have received a copy of all documents pertaining to the current lease in place, including the Lease Agreement and any additional documents that have been checked in the lease as being a part of the lease (Paragraph 31: Addenda), including the Inventory and Condition Form the Tenant provided to the current LL and any pictures the LL had from prior to Tenant move in. You'll need these for reference at the end of the lease term. You'll need to submit to the Notice to Tenant of Change in Management.

Hope this helps!
Darby Grimmett, KW, 936-827-9217, darby@darbygrimmett.com


about 2 weeks ago
Diamond
Francois Delille
about 1 week ago
Yes but your realtor should not have let you close without getting it on HUD, it is property management 101 and it is a TREC contract obligation so technically the Title company should not have missed it as a contract administrator.
What do you do if the previous owner does not want to release the deposit? You can send him a demand letter and take him to small claims court as needed.


about 1 week ago
Bronze
Ryan Kohn
about 1 week ago
I agree with the previous 2 post and they are on the money, however to expand on a different scenario in the event your question was misinterpreted. If you were previously renting the home that you purchased, unless stipulated otherwise in the purchase contract, the security deposit should have been credited to the closing documents. If not, the landlord is given 30 days under Chapter 92 of the Texas Property code to give notice of with holding of security deposit or refund it. In particular sec 92.103 listed on page 51 of the attached link. Since the home was purchased by the tenant, the landlord would have no claim to the security deposit. If not specified in the purchase contract otherwise and rent was not delinquent, a small claims suit, if needed should find in your favor.


Source:


http://www.statutes.legis.state.tx.us/Docs/PR/pdf/PR.92.pdf

about 1 week ago
Bronze
Christopher Dayanand
about 2 days ago
Normally a security deposit is for rental house that needs to be returned when you move out of the house. It looks like you had an agreement or changed it from lease to buy. It depends on what has been decided by both parties. Your security deposit will be used for down payment or closing cost or anything that you decided with other party then only during those cases you will not get a security deposit back. If this item is no where discussed and you purchase the house, then I believe it should be returned back to you.

Chris
Coldwell Bankers
www.ChrisRealEstatePro.com
832.859.8698


about 2 days ago
Disclaimer: Answers provided are just opinions and should not be accepted as advice.
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