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  1. #1
    Join Date
    May 2017
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    1

    Default Who Gets the Security Deposit at the End of a Sublease

    My question involves landlord-tenant law in the State of NC:

    we recently signed a sublease (or a lease takeover?) to take over 3 remaining months of the original tenant (OT)'s lease. paperwork was signed last week through the apartment management office only and nothing was signed between us and the OT. paperwork says that OT's security deposit stays on the lease until we move out at the end of the lease. we thought we were set to go.

    OT is now wanting us to sign an agreement between him and us that we will return the security deposit in full to him at the end of the lease. he wants us to walk through the apartment and sign an agreement saying that it is in tip-top shape.

    the problem is, we want the apartment complex management to do this walk-through and sign off (which they are unwilling to do at this time) for us to be comfortable with signing this agreement with the OT. after all, our subjective ideas of what is "tip top shape" may not jive with the management's idea. we are happy to return whatever portion of the security deposit we are given at the end of the lease but simply cannot guarantee that we will refund the full amount of what OT paid at this time.

    OT is now threatening to back out of the sublease agreement if we do not sign this document.

    questions:
    1) who owns the right to the security deposit?
    2) can OT back out of the sublease agreement, despite all the paperwork being signed? we move in next week.

    thank you for your help!

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Who Gets the Security Deposit at the End of a Sublease

    If this is a sublease, then you would pay your security deposit to the master tenant who would repay it to you at the end of the sublease. The master tenant would recover the security deposit from the master lease from the master tenant's landlord. This does not sound like a sublease, as the master tenant has not signed anything; at most, it would be an approval by the landlord for a yet-to-occur sublease.

    If this is an assignment ("takeover"), it is possible that the issue is addressed in the contract signed to effect the assignment of the lease. If not, normally the new tenant would step into the shoes of the former tenant such that the security deposit would be refunded to the new tenant -- but the former tenant may still have a legal, equitable or contractual claim to the money, depending on the full facts. If the current tenant has not signed anything to approve the assignment of the lease, then they are still renting the property -- the assignment cannot be completed without their consent.

    Nobody can comment on whether this sublease (or assignment) is binding without first reading it.

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