Final answer:
Upon the sale of a rental property, the security deposit may either be transferred to the new owner or returned to the tenant based on the terms and applicable laws. The tenant must vacate and return all items provided, and failure to do so can result in additional charges that may impact the security deposit.
Step-by-step explanation:
Upon the sale of a residential rental property, the security deposit may be transferred to the new owner, or alternatively, it may be returned to the tenant, depending on the terms of the sale agreement and state laws. When a property is sold, the responsibility for the tenant's security deposit often shifts to the new property owner. The outgoing owner should either transfer the funds and related documentation to the purchaser or return the deposit to the tenant, less any allowable deductions. Termination of the lease agreement typically requires a written notice from either party, and the tenant must vacate the premises and return keys and other property to the owner. If the tenant does not vacate on time or leaves belongings behind, they could be liable for additional rent and damages, potentially affecting the transfer or return of the security deposit.