Arizona · A.R.S. 33-1321Arizona tenant security deposits when a rental property is sold

Buying a tenant-occupied home in Arizona means taking on the tenants' deposits. Under A.R.S. §33-1321(H), the holder of the landlord's interest in the premises at the time the tenancy ends is bound by the security deposit rules – so after closing, that's the buyer, whether or not the seller handed the money over. The rules the buyer inherits: a landlord can't demand or receive security, including prepaid rent, of more than one and one-half month's rent (a tenant may voluntarily prepay more rent); the purpose of every nonrefundable fee or deposit must be stated in writing, and anything not designated nonrefundable is refundable; at move-in the tenant gets a signed lease, a move-in form for existing damage and notice that they may attend the move-out inspection. When the tenancy ends and the tenant has delivered possession and made a demand, the landlord has 14 days, excluding weekends and legal holidays, to give an itemized list of deductions with any amount due, mailed first class to the tenant's last known address unless the tenant arranges otherwise in writing; a landlord who doesn't comply can owe the money plus damages of twice the amount wrongfully withheld. Separately, the landlord must disclose in writing the names and addresses of the property manager and of an owner or agent for notices – kept current and enforceable against any successor landlord or owner (§33-1322). For the sale itself, the statute doesn't set how deposits move from seller to buyer, so the purchase contract and the settlement statement should.