Buyer of rental property says he doesn't have security deposit

Q. I purchased a six-flat about six months ago. One of my tenant's leases was up at the end of June and she notified me a few weeks before the end of the month that she would not be renewing her lease. No problem there.

The day after she moved out she sent me an email telling me where to send her security deposit. I received a rent roll from the seller when I bought the building that showed there was no security deposit for her apartment. There was a security deposit on the lease, but the seller told me he used the security deposit for the last month's (June) rent.

I conveyed this to my ex-tenant who denied she didn't pay the last month's rent and again insisted I return her security deposit. She is threatening to report me to the village and take other action to recover her deposit.

I contacted the seller's attorney who said he would try and get a hold of the seller but that has gone nowhere. Not sure what I should do now. Any thoughts?

A. The indication on the lease that a security deposit was made should have been a red flag to you and (if you were represented) your attorney that the possibility existed that the tenant would be seeking the return of the deposit upon her vacating the apartment. Many attorneys insist on an estoppel letter from all tenants prior to or at closing. An estoppel letter is a signed statement from each tenant verifying the status of the lease. This statement would include whether or not the seller/owner was holding a security deposit of the tenant.

My suggestion would be to restate the seller's allegation regarding how June rent was paid and request the ex-tenant send you proof of her June rent payment. If she is unable to furnish proof of payment or insists she paid cash, I would tend to believe the seller, though that may not help you in the long run. If she furnishes proof of a June rent payment, you owe her the money.

If it appears you owe the money or the ex-tenant persists, you will need to locate the seller. If she brings a lawsuit to collect the deposit, you could bring the seller into the lawsuit through a third party complaint. That way, at least you would have the seller available to respond to her claims. If you are unable to locate the seller, you may end up being on the hook for the amount of the deposit.

If you cannot locate the seller and it appears the tenant's position is sound, you may try offering half the deposit as a resolution. The ex-tenant may accept this to avoid the time and expense of initiating legal action against you.

Q. My wife and I live in a rural area on about 30 acres. About five years ago, I asked my longtime neighbor just west of me if I could purchase a strip of land from him that abutted both properties. I needed the land because I was building a new barn and without the strip of land it would be too close to my neighbor's property.

He agreed and we got a surveyor to provide a legal description of the land I was to acquire. He signed a quitclaim deed for the property and I paid him per our agreement.

My neighbor recently passed away and I received a letter from an attorney regarding my purchase of the land. He indicated the neighbor's property was in a trust and that the deed conveying this strip of land to me had no effect.

This presents numerous problems, not the least of which being that the barn I constructed is now in violation of the local zoning law. The attorney suggested I obtain legal counsel and have that person call him.

What is your take on all this?

A. For starters, my guess is you did not retain an attorney to assist you in your purchase. If you had, he or she would have insisted on the seller furnishing a title commitment as part of the transaction. The title commitment would have indicated that the owner of the property was not John Q. Neighbor, but the John Q. Neighbor Trust. The appropriate deed would have been prepared and you wouldn't be writing me.

Remember, a quitclaim deed simply conveys whatever interest the grantor has in a property, to the grantee. I can sign and deliver to you a perfectly legal quitclaim deed to Wrigley Field. It's worthless, of course, as I don't have an interest in Wrigley Field, which is unfortunate. However, this type of deed does not warrant that I have an interest in Wrigley, it just conveys whatever interest I have to you.

I would immediately retain a real estate attorney. Hopefully, you can convince the subsequent owner of the property that you and your longtime neighbor made a deal, the property was paid for and that the right thing to do would be to execute the appropriate document to convey this strip of land to you. Unfortunately, in the event the subsequent owner refuses to play ball, you've got a problem.

• Send your questions to attorney Tom Resnick, 345 N. Quentin Road, Palatine, IL 60067, by email to tdr100@hotmail.com or call (847) 359-8983.