What Happens to a Security Deposit When a Calgary Rental Sells?

Obtain the agreement, deposit receipt, amount, date, payer, tenancy start, trust records and any later top-up, refund, transfer or deduction. Confirm the deposit did not exceed the permitted relationship to the first month's rent when collected and that it belongs to the current tenancy.

Do not use the seller's current trust-account balance as the only evidence. A short balance can still leave the buyer with responsibility after closing.

Use Alberta's prescribed rate for each calendar period the deposit was held, not the current year's rate for the entire tenancy. In 2026 the prescribed rate is 0%, while prior years can differ. Preserve the official calculation and dates.

Interest must generally be paid annually when the rate is above zero unless the landlord and tenant agree in writing to compound it annually and pay it at the end. Reconcile any interest already paid or credited.

The seller's deposit trust handling and the lawyers' purchase-price adjustment are connected but distinct records. Identify how principal and accrued unpaid interest will move or be credited and what evidence the buyer receives.

Use verified lawyer instructions. Do not ask the tenant to pay a second deposit or accept an unexplained balance simply because ownership changes.

A person acquiring the landlord's interest becomes subject to deposit rights and obligations. The buyer should assume that the tenant can look to the new landlord for the deposit refund at tenancy end even if the prior owner did not transfer sufficient money.

Price that exposure before closing and ask the Alberta lawyer how the agreement, adjustments and seller obligations protect the buyer. The tenant should not bear the risk of a failed seller-to-buyer handoff.

Collect move-in and any move-out inspection reports, attendance offers, statements, signatures, dated photographs, promised repairs and later condition communication. Deposit deductions at tenancy end depend on lawful grounds, timing and evidence.

A sale is not a move-out and does not itself authorize damage deductions. Keep unresolved repair or damage issues in the maintenance and transaction file rather than silently reducing the transferred deposit.

Prepare a rent ledger through closing with arrears, credits, prepaid rent, utilities and other authorized charges. Keep the security deposit ledger separate so rent disputes do not become undocumented deposit deductions.

The purchase adjustment date can split collected rent between seller and buyer. State which party handles a payment received near closing and how the tenant receives a reliable receipt.

After transfer, provide the tenant with the new landlord's lawful notice and verified contact and payment route. Include a statement of deposit principal and accumulated interest as of transfer within a reasonable time, without charging the tenant.

Warn the tenant about payment-instruction fraud and provide a way to verify changes independently. Do not include private banking details in a public listing or general website form.

Store the agreement, receipt, trust evidence, annual rate calculations, compounding agreement, payments, transfer adjustment, tenant statement, inspections, notices, communications and any RTDRS or court material.

Review the ledger at each annual interest date, property-management change, refinance, sale and tenancy end. A complete handoff lets the new landlord manage the eventual refund or supported deduction from evidence rather than memory.

Last source review: July 30, 2026. Agreements, prescribed reasons, notice requirements, service rules, interest rates, dispute processes, lender policies, insurance terms and transaction contracts can change. Verify the actual tenancy and purchase agreement with the Alberta lawyer, licensed real estate professional, property manager, lender, insurer or government service responsible for the answer.