What are my rights as a tenant when my landlord files for bankruptcy?

UPDATED: Jul 21, 2010

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What are my rights as a tenant when my landlord files for bankruptcy?

Should I continue to pay rent and to who? If I pay the rent I can’t afford to move as I did not pay a security deposit when I moved in. I was renting with the option to buy (on a land contract) but the landlord has an ARM on the house he can’t afford to pay. He has tried to refinance without any success. I have 4 kids and a grandchild who live with me.

Asked on July 21, 2010 under Real Estate Law, Michigan


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

Has your landlord filed for bankruptcy yet or are you anticipating that he may? Has he defaulted and is he in foreclosure?  What is the most important aspect of your question is your option to buy.  Is that a written contract I hope?  Is it signed by all parties and dated to when you moved in?  That is what you have to focus on at this point along with the immediate worries you have of shelter.  Generally you continue to pay rent to your landlord unless you are notified by someone who has stepped in legally to the situation, like a Trustee in Bankruptcy or a Receiver in a Foreclosure proceeding.  But get receipts.  And if I were you I would seek legal help as soon as you can as to the rent with the option to buy contract.  And have your landlord get help with a loan modification.  In these times there are state agencies - look at the attorney general's website - that will help those in financial need in our economy.  Good luck.

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