If my landlord has filed for bankruptcy what does this mean for me?
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If my landlord has filed for bankruptcy what does this mean for me?
Asked on April 1, 2011 under Real Estate Law, Arkansas
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Your landlord's bankruptcy filing does not affect your right to remain in your rental or affect your landlord's obligation to allow you to remain there. Depending on the chapter (i.e. type) of bankruptcy, 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 event of a foreclosure, a tenant who has a written lease can continue to occupy the rental until the end of the lease period, or 90 days, whichever is longer (unless the new owner intends to move in and occupy the home as their primary residence; in that case a 90 day notice to move would apply). A tenant with a month-to-month lease, or no lease at all, has to be given at least 90 days notice to move. Additionally, in cases where state law provides more protection than the federal law, the state law applies.
You should consult directly with a landlord-tenant attorney in your area for further explanation of your rights.
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