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Refund of security deposit to the sub-tenant at the end of lease

What happens to the security deposit in case of transfer of a commercial property?

Does it get transferred to the buyer or it is paid to the seller?

(I am assuming that the tenancy contract is in the name of the business rather than the individual).

Iqra Salim

Dr. Hassan Al Marzooqi Advocates & Legal Consultants

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10 Oct 2017, 06:35

Dear,

What exactly you are looking for?

The security amount paid towards tenancy is refundable deposit with the conditions attached to it.

However, in case of the sale of property, the downpayment is part of the total sale transaction and is paid to the seller.

Regards

10 Oct 2017, 10:23

To elaborate, I am purchasing a running business license (along with staff and assets...etc.) and the business is on a lease (not freehold).

Does the security deposit paid earlier by the tenant (i.e. the seller of business) to the landlord gets refunded to the seller pursuant to the transfer, or it remains with the landlord as a security deposit towards new lease contract under my name?

Actually, I have signed with the seller an MOU agreeing that the I will have the right of security deposit held with the landlord.

I am not sure how it works, but if the landlord hands over the security deposit cheque to the seller, how will I get my right of the same in case the seller gets away with our agreement?

10 Oct 2017, 11:46

You may inform the landlord and he will not refund at all since it is a part of the said sale transaction. You would not be needing to pay as the same will be transferred if agreed in the MOU.

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