If my landlord has filed for bankruptcy, what can I expect to happen from here?

Asked on September 17, 2011 under Real Estate Law, California

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Your landlord's bankruptcy filing may or may not affect your right to remain on the premises. Depending on the type (i.e. Chapter) of bankruptcy that was filed, you may end up paying your rent to the bankruptcy trustee or to the court instead of paying directly to your landlord (you will be officially notified of this). However, if there's a written lease and it has a term that states that the tenancy is terminated if the landlord declares bankruptcy, the in such an event your lease would end.  Also, if the property ends up being foreclosed on by up your landlord's mortgage lender that would end your landlord's ownership (at that point you would no longer pay rent to them but to whomever the lender then designated; again you will be officially notified of this). 

In the event of a foreclosure, a tenant has certain protection. If they who have a written lease, then they can continue to occupy the rental until the end of the lease period, or 90 days, whichever is longer. That is unless the new owner intends to move in and occupy the home as their primary residence; in that case a 90 day notice to move would apply.  A tenant with a month-to-month lease, or no lease at all, has to be given at least 90 days notice to move. 

Note: In cases where state/local law provides more protection than the federal law, the state law applies. 

You should consult directly with a landlord-tenant attorney in your area for further explanation of your rights.


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