Court of Cassation ruling on security deposits affects millions of tenants

The 3rd Civil Chamber of the Court of Cassation has issued a landmark ruling regarding which landlord is liable for the return of a security deposit in the event that a rented property is sold. The Chamber ruled that if the former owner cannot prove that they transferred the security deposit to the new owner, their obligation to return it to the tenant continues.

DISPUTE BEGAN IN GAZIANTEP

A tenant living in Gaziantep requested the return of a 300-dollar security deposit from their former landlord after the house was sold while the lease was still active. The tenant stopped paying rent after the sale, requesting that the security deposit amount be offset against the rent.

The tenant, having experienced a dispute with the former landlord, initiated enforcement proceedings to collect the amount. The case was heard at the Gaziantep 1st Civil Court of Peace.

LOCAL COURT HELD NEW OWNER RESPONSIBLE

The local court ruled that with the sale of the house, the new owner became a party to the lease agreement, and therefore the security deposit claim should be directed at the new landlord rather than the former one.

This decision was appealed by the Ministry of Justice for the benefit of the law. Upon reviewing the file, the 3rd Civil Chamber of the Court of Cassation overturned the local court's decision.

DEPOSIT MUST BE TRANSFERRED TO THE NEW OWNER

In its ruling, the Court of Cassation stated that with the change of ownership of the property, the new owner assumes the rights and obligations arising from the lease agreement. However, it was noted that the previous owner is required to transfer the security deposit received at the beginning of the lease relationship to the new owner.

The Chamber emphasized that the former owner must prove that this transfer took place.

The ruling included the following statement:

“The defendant (former landlord) must prove that they transferred the security deposit received at the beginning of the lease relationship to the new owner. Because, if it cannot be proven that the security deposit was transferred to the new owner, the obligation to return it remains with the previous owner who received the security deposit.”

FORMER LANDLORD MUST PROVE WITH DOCUMENTATION

According to the ruling, a former owner who sells their property is obligated to transfer the security deposit received from the tenant to the new landlord. However, if they cannot document that the deposit was transferred to the new owner, the tenant remains entitled to demand the security deposit from the former landlord.