Legal Question in Real Estate Law in California

You ought to get your deposit back or it should be transferred to the new owner.

When a rental property changes ownership, the Civil Code provides for two ways for the tenant's security deposit to be handled: (1) It can be refunded to the tenant by the selling owner, in which case the new owner can ask for a new deposit; or (2) it can be given to the new owner as part of the proprty-sale transaction.

Most likely, the seller is in bad financial shape and doesn't have the money. If the money wasn't transferred (which is likely), you have a claim against the former owner and the new owner can ask you for a new deposit.

If the rental is sold while the tenant still lives there, the landlord is supposed to transfer the security deposit to the new owner, and the new owner is supposed to refund all of the deposit, or the portion that the tenant is entitled to, when he or she moves out. If the previous owner fails to transfer the security deposit to the new owner, the tenant can sue the prior owner for its return, or for the portion that the tenant is entitled to receive.