How to Get My Deposit After a Foreclosure

Your security deposit isn't at risk because of a foreclosure. The bank or other new owner of the property becomes the landlord after the foreclosure and in most situations must honor the terms of your signed lease agreement. That usually means allowing you to remain in the apartment or house until your lease expires and then refunding the deposit. Knowing your legal rights is important, because you should not rely solely on information provided by the bank or other new landlord.

Instructions

1

Contact an attorney or a housing counselor certified by the U.S. Department of Housing and Urban Development. Find a government-approved housing counselor in your community by contacting a charitable organization such as the Urban League or Salvation Army. Also contact Legal Aid or a similar nonprofit organization to apply for free legal assistance from an attorney.

2

Speak with the attorney or housing attorney about the specific steps you must take in your state to get your deposit back. Individual state laws may vary, but you should always begin by simply asking the bank or the new owner to refund your deposit. Make contact by telephone and follow up in writing by sending a letter via certified mail, with a return receipt requested. In the letter simply indicate that you are moving out of the home, or will be moving, and would like your security deposit returned.

3

Send a second letter, also by certified mail, if you do not receive a response within 30 days. The second letter should be more strongly worded than the first and should cite specific state law requiring the bank or new owner to return your deposit. The housing counselor or attorney can help you with the wording, or ask for help finding the state law at a local law school library or another public library. Ask for assistance at a local office for your state attorney general if necessary.

4

File a lawsuit in civil court if the bank or new owner still does not respond. Massachusetts Poverty Law Advocates, a nonprofit legal aid organization, also suggests that a lawsuit is a smart strategic move if you are still in the home and have received an eviction notice. The security deposit lawsuit can act as a counterclaim against the eviction notice and force a judge to consider them jointly. The judge may rule that the bank or new owner must allow you to remain in the home until your lease expires and that your security deposit must be returned at the end of the lease.