What are a tenant’s rights if their landlord filed Chapter 7?

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What are a tenant’s rights if their landlord filed Chapter 7?

My landlord filed Chapter 7 bankruptcy and has not notified me about anything that is going on. I heard about it though his stepdaughter and she has asked me not to say anything to him. I lived in apartment 2 and have moved into apartment 1 and took over my ex-brother-in-law’s lease. I had a 1 year lease where the one I took over is a 2 year lease. I need to know what my rights are.

Asked on August 15, 2011 Michigan

Answers:

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

Answered 10 years ago | Contributor

The fact is that a landlord's bankruptcy filing does not affect a tenant's right to remain in their rental or affect their landlord's obligation to allow them to remain there. You may end up paying your rent to the bankruptcy trustee or to the court instead of paying directly to the landlord.  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). 

Note:  In the property is foreclosed on, a tenant who has a written lease can continue to occupy the rental until the end of the lease term, or 90 days, whichever is longer (that is unless the new owner intends to move in and occupy the home as their residence; in that case a 90 day notice to move applies).  A tenant with a month-to-month lease, or no lease at all, has to be given at least 90 days notice to move.   

You should consider consulting directly with a landlord-tenant attorney or tenant's rights group in your area for further explanation of your rights/responsibilities.


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