Q I recently bought a private property through a housing agent.
It is still tenanted. The sale/purchase process will be completed soon.
Through my lawyer, on numerous occasions, I have insisted that the tenant's security deposit be transferred to me but the seller's lawyer has refused to do so.
What can I do about this?
Do I have the right to insist on the transfer of the security deposit prior to the completion of the sale/purchase process?
A It is usual for the security deposit to be transferred to the purchaser of a property.
You should inquire as to why the security deposit has not been transferred to you. It may be because there are arrears of rental by the tenant to the seller.
But you do not have the right to insist on the transfer of the security deposit unless this was expressly included in the terms of the agreement for the purchase of the property.
If the security deposit is not transferred to the purchaser, there is no obligation for the purchaser to return the security deposit to the tenant.
The obligation remains with the seller of the property to return it to the tenant and the tenant is entitled to ask the seller for the return of the deposit.
As you purchased subject to the tenancy, the tenant is entitled to stay until the term of the tenancy expires so long as he pays the rent promptly and does not breach any of the terms of the tenancy agreement.
You should therefore monitor the payments carefully until the term of the tenancy expires as you will not have the security deposit to offset against any arrears of rent.
If the tenant falls into arrears, the tenancy should be terminated under the terms of the tenancy agreement as soon as possible.
Lim Choi Ming
Lawyer
TM Hoon & Co
Advice provided in this column is not meant as a substitute for comprehensive professional advice. E-mail questions to chanteik@sph.com.sg
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