When selling a home subject to a lease, and the buyer becomes the new landlord, who gets the deposits?

We have that covered in our contract. Deposits are turned over to the new owner. The money actually belongs to the tenant.

What about the nonrefundable deposits?

When a property is purchased subject to a lease, the deposit may or may not be transferred to the new owner depending on what the sales contract specifies but the liability does transfer with the sale. If the deposit does not transfer to the new owner, the new owner must come up with the deposit when the tenant moves out.

So, in answer to your question, who gets the deposit is negotiable but the tenant is still due his/her deposit at the termination of the lease.

Typically a new owner gets the deposits (or should) and a pro rated portion of any partial months rents.

YMMV

Security deposit and/or any refundable amount is transfered however it can roll into the sales price.

And if they back out after 3 years where does the money go? Is it handled just like a contract for deed?

After reading some of the responses I wonder if I didn't make myself clearer...I'll try again. I have a condothe owner wants rented and sold. If I rent it for $750 a month and then added 100 more to the rent to be placed in escrow for the new buyer's deposit..should it be "escrow" what about the interest on this...does it go to the new buyer's side? Are there any laws on this type of thing? I thought it might help him rent and sell it to do this.