What happens to the security deposit if a California landlord sells the property?

California statutes typically give the landlord two options: transfer the deposit to the new owner with written notice to the tenant identifying the new holder, or return the deposit directly to the tenant minus any documented deductions. The landlord cannot simply pocket the deposit at sale; the deposit belongs to the tenant subject only to legitimate deductions at end of tenancy. The new owner takes over the obligation to return the deposit at move-out under the same statute (Cal. Civ. Code 1950.5(h)(1)), regardless of whether the prior owner forwarded it. Tenants should request a written confirmation from the new owner that the deposit has been received, and keep it with the lease records. If neither owner can produce the deposit at move-out, the tenant has a claim against both. Up to twice the wrongfully withheld amount if the court finds bad faith. Attorney fees also recoverable.

Source: Cal. Civ. Code 1950.5(h)(1)