If Iam renting my property and my landlord has now filled for Chapter 11, am I entitled to have any money returned?
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If Iam renting my property and my landlord has now filled for Chapter 11, am I entitled to have any money returned?
My family signed our lease agreement on 8/18/10 and are now being evicted due to the landlord’s property going into foreclosure. She filed for bankruptcy last week. Am I entitled to any money being returned since she knowingly took money from me when she was in foreclosure and is now going bankrupt? I am being evicted and am going to eviction court on 11/1/10.
Asked on October 28, 2010 under Real Estate Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
1) You will be entitled to your security deposit once your tenancy with this landlord is over (see below).
2) Once the property has been sold in foreclosure sale, she is no longer the owner and you don't have to keep paying rent.
3) The new owner has a right to evict tenants of the old owner, but you should be able to get at least 90 days from the time that the new owner takes possession under a federa law called, I think, the "Saving our Homes Act" (or something similar) signed into law in May '09 to protect tenants in your situation. You might even, depending on the situation, be able to live out the balance of this lease term. You should look at the law and see how it applies.
4) If the former landlord, the one you signed with, knew or reasonably should have known she would have her property foreclosed on at the time you signed the lease, her failure to disclose that might give you grounds to rescind the lease--it might be considered fraud. You'd most likely still have to pay for the time you actually lived there (you got that value), but may be able to recover other damages, such as expenses for having to move or store goods a second time.
You should probably engage an attorney to help you vinidate all your rights.
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