What happens with the lease and the deposit if a property is sold while tenants are still under lease
In accordance with housing rules, existing leases are transferred from the seller to the buyer and are automatically assigned to the new owner. There is no need to sign a new lease. The previous Alcove homeowner (seller) must ensure that the tenants' deposits are promptly transferred to the new homeowner (buyer). The seller will also need to notify the tenants of the transfer and the new location of their deposit. This can be done by accessing the tenants' contact information via the 'Leases & Tenants' tab on the manager portal.
Once the sale is completed, the previous Alcove homeowner (seller) should use the following link to register as a new landlord: https://alcoverooms.com/register.
After completing the registration process, send an email to partner@alcoverooms.com to confirm the transaction. This step is necessary for verification purposes and to ensure the transfer of the account ownership.
To view applicable housing rules governing the transfer of leases and deposits, please see the information below: (Please be advised: We strongly recommend consulting with your legal counsel or agent, as this information is provided for general guidance and does not constitute legal advice.
In North Carolina
§ 42-54. Transfer of dwelling units. Upon termination of the landlord's interest in the dwelling unit in question, whether by sale, assignment, death, appointment of receiver or otherwise, the landlord or his agent shall, within 30 days, do one of the following acts, either of which shall relieve him of further liability with respect to such payment or deposit: (1) Transfer the portion of such payment or deposit remaining after any lawful deductions made under this section to the landlord's successor in interest and thereafter notify the tenant by mail of such transfer and of the transferee's name and address; or (2) Return the portion of such payment or deposit remaining after any lawful deductions made under this section to the tenant. (1977, c. 914, s. 1.)
Source: North Carolina's Chapter 42 Statute
In Georgia
Transfer of Deposit: If someone new buys the property, the former owner must either transfer the deposit to the new owner, who becomes responsible for it, or the old owner must refund the security deposit to you. If the old owner fails to take either of these actions, you can sue to recover the security deposit. Before filing a lawsuit, you should write to the old and new owners requesting information on the security deposit.
Source: Georgia Landlord-Tenant Handbook
In Texas
Sec. 92.105. CESSATION OF OWNER'S INTEREST.
(a) If the owner's interest in the premises is terminated by sale, assignment, death, appointment of a receiver, bankruptcy, or otherwise, the new owner is liable for the return of security deposits according to this subchapter from the date title to the premises is acquired.
(b) The new owner shall deliver to the tenant a signed statement acknowledging that the new owner has acquired the property and is responsible for the tenant's security deposit and specifying the exact dollar amount of the deposit.
(b-1) The person who no longer owns an interest in the rental premises is liable for a security deposit received while the person was the owner until the new owner has received the deposit or has assumed the liability for the deposit, unless otherwise specified by the parties in a written contract.
(c) Subsection (a) does not apply to a real estate mortgage lienholder who acquires title by foreclosure.
Source: PROPERTY CODE: TITLE 8. LANDLORD AND TENANT
In South Carolina
SECTION 27-40-450. Limitation of liability.
(a) Unless otherwise agreed, a landlord who conveys the premises that include a dwelling unit subject to a rental agreement in a good faith sale to a bona fide purchaser is relieved of liability under the rental agreement and this chapter as to events occurring after written notice to the tenant of the conveyance. However, he remains liable to the tenant for security recoverable by the tenant under Section 27-40-410, unless the security deposit is transferred from the seller to the purchaser and the tenant is notified in writing a reasonable time after the transaction in which case the purchaser is liable under Section 27-40-410.
(b) Unless otherwise agreed, a manager of the premises that includes a dwelling unit is relieved of liability under the rental agreement and this chapter as to events occurring after written notice to the tenant of the termination of his management.
Source: South Carolina Code of Laws, Title 27