Unlawful detainer eviction from business

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Unlawful detainer eviction from business

A client of mine has been served with an unlawful detainer eviction and owes
30k in back rent for their business. She is not sure what to do because they do
not have the funds to make the payments. What is the likely ruling from the
judge? Will the judge order her to file for bankruptcy? She does not have any
assets or property. Is this a punishable crime i.e. jail?

Asked on September 27, 2016 under Real Estate Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

1) She can expect to be evicted if she owes money and doesn't have it by the court date; nonpayment of rent is *the* most straightforward grounds for eviction.
2) An individual cannot be ordered to file bankruptcy, so if she legally is the tenant who owes money (her business is a sole proprietorship for example), this can't happen. If the tenant who owes money is an LLC or corporation, it potentially *could* be ordered to file for the benefit of creditors (e.g. to file a reorganization plan), but that's a very different proceeding in a very different court and will not be part of this. Note that if she or her business (if it's an LLC or corporation) voluntarily files for bankruptcy, it will temporarily stop (for a few weeks or months) any eviction; and if she is personally liable for the money (e.g. she was the tenant, or she guaranteed the lease), it may help protect her from the debt.
3) It is not a crime to owe money unless she committed fraud (e.g. lied about her business assets or income to get approved for the lease).


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