Cal. Civ. Code § 1.1
In the event of a sale, lease, transfer or other direct or indirect disposition of residential real property, other than to the holder of a lien interest in such property, by a lessor who has received a security deposit or prepaid rent from a lessee, the transferee of such property shall be liable to that lessee for any security deposit, including statutory interest, or prepaid rent which the lessee has paid to the transferor. Transferor shall remain jointly and severally liable with the transferee to the lessee for such security deposit or prepaid rent
Operative Text
In the event of a sale, lease, transfer or other direct or indirect disposition of residential real property, other than to the holder of a lien interest in such property, by a lessor who has received a security deposit or prepaid rent from a lessee, the transferee of such property shall be liable to that lessee for any security deposit, including statutory interest, or prepaid rent which the lessee has paid to the transferor. Transferor shall remain jointly and severally liable with the transferee to the lessee for such security deposit or prepaid rent.
Under 765 Ill. Comp. Stat. 710 § 1.1, when residential rental property changes hands through a sale, lease, transfer, or similar transaction (excluding transfers to lien holders), the new owner automatically becomes responsible to existing tenants for any security deposits and prepaid rent that were collected by the previous owner, including any statutory interest that has accrued. Critically, the original owner does not escape responsibility simply by transferring the property — both the prior and new owner share joint and several liability for those funds. This means a tenant can seek the full amount from either party, or both.
Plain English — not legal advice.
Property owners and managers operating under 765 Ill. Comp. Stat. 710 § 1.1 generally account for all outstanding tenant security deposits and prepaid rent as part of any property transfer transaction. Compliant operators typically ensure that deposit funds and accurate records are formally transferred to the new owner at closing, and that the purchase agreement clearly addresses how these obligations will be handled between the parties. Because the original owner retains joint and several liability after the transfer, sellers commonly document the handoff of deposit funds carefully to protect themselves from future claims.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under 765 Ill. Comp. Stat. 710 § 1.1, tenants retain the right to recover their security deposits, including statutory interest, and any prepaid rent even after their building is sold or transferred to a new owner. Because both the prior owner and the new owner are jointly and severally liable, tenants have the ability to pursue either or both parties for the full amount owed. Tenants who believe their deposit or prepaid rent has not been properly accounted for following a property transfer may consider reaching out to a local tenant-rights organization or consulting with a housing attorney to understand the options available to them.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 18, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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