Under what conditions can a rental agreement be rescinded?

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Under what conditions can a rental agreement be rescinded?

I am moving cross country and was approved to moved into an apartment. I received the letter that I was conditionally accepted and that I would have to pay a deposit. I did. Now they say I can’t move in because I have an open Chapter 13 bankruptcy. Do I have any legal rights here?

Asked on March 30, 2012 under Real Estate Law, Arizona

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

As a general matter, a bankruptcy would *not* allow the landlord/rental agent/property manager to rescind the rental agreement (or lease) once one has been executed by both parties.

However, if you were only "conditionally" approved, then it may be legal to do this--a landlord, etc. is allowed to look to a potential renter's credit worthiness or credit history in determine whether or not to rent to him/her, and if prior to full approval and execution of the lease, the information about your Ch. 13 came up, they could use that information as the basis to decline to rent to you.

In addition, if during the application, there was any question(s) which touched on bankruptcy, credit issues, etc. and you did not bring up the Ch. 13, that might constitute fraud on your part, which could provide a basis not only for refusing to rent, but even potentially to have rescinded a lease, had one been executed.


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