Landlord’s Rights in Bankruptcy
When a tenant files for bankruptcy, landlord’s are often in the dark about their rights and protections.
The landlord is entitled to receive rent or its use and occupancy (depending on if there is an existing lease) while the bankruptcy case is pending. In fact, any rental arrears incurred during a bankruptcy case (no matter the chapter), are an “administrative expense” entitling the landlord to be paid before most other creditors.
If the landlord has a pending eviction action against a tenant for nonpayment or holdover, the automatic stay generally applies. In most cases, the landlord will need to make a motion to the Bankruptcy Court to allow the eviction action to continue.
If the landlord has already obtained a judgment of possession at the time of bankruptcy, the automatic stay does not even apply in the case, unless the tenant files a money deposit with the Bankruptcy Court payable to the landlord. And in is this event, the bankruptcy stay is still very limited.
Call us to see how we can protect your rights as a landlord in your tenant’s bankruptcy case.
Eviction Actions
If your tenant is not paying rent, disturbing other tenants’ “peaceful enjoyment,” engaged in illegal or impermissible activity under the lease or is “holding over” at the end of lease term, the tenant can be evicted.
Under New York law, the landlord must bring an eviction action (a summary proceeding) to remove the tenant from the premises. This requires filing a Notice of Petition and Petition with the appropriate court. A judge will hear the case and determine whether the tenant should be evicted.
Call us if you need assistance with the removal of the tenant(s) in your premises.