Posted by JohnBoy on June 26, 2001 at 12:12:34:
It goes to pay the first month’s rent. The security deposit is held by the seller to cover any damages or apply towards past due rents. The option money would be lost as non-refundable option consideration.
If the tenant doesn’t pay a month’s rent you serve notice, then evict if they don’t cure and sue for any rents due. Then find a new tenant/buyer and start the process over again.