Our Landlords Filed Chapter 7

[kascls]

We rented a house in August 2008. In October the owners filed bankrupty (chapter 7). I checked pacer and the owners intention is to surrender the home. The meeting with the creditors was held earlier this month (December). The owners want us out of the house. They said they think they could live in the house for several months "for free" until they are evicted.

We are interested in continuing to rent or possibly purchase the home outright. I contacted the mortgage holder (or at least they service the loan). They said they couldn't do anything until the bankruptcy stuff is finished.

So here we sit. The landlords want us out, we want to stay and the mortgage company can't help. My question is...

Can the landlord evict us from a house that is being surrendered in a chapter 7?

[JRScott]

Did you sign a rental agreement?

What state are you in?

[kascls]

We signed a two year rental agreement

We are in Georgia.

It is my understanding that the filing of chapter 7 paperwork (and the intent to surrender the home) essentially cancels our rental agreement. I have discussed this with the mortgage company and an attorney - they both advised me to stop paying the landlord. The mortgage company doesn't want me to pay them since the property hasn't gone through the process yet.

So does the landlord have the legal standing to evict us from a house that he is surrendering via chapter 7?

[justbroke]

So does the landlord have the legal standing to evict us from a house that he is surrendering via chapter 7?

Well, they need to file a Motion to Reject Residential Lease or allow the 60 days to expire. If 60-days has passed between the filing and now, then it's automatically rejected. Since you say October, that 60-days is just about up, or already is.

However, lease rejection, automatically or by Motion, is not lease termination.

They may need to actually proceed to evict you if they want you to go. This is a very tricky area of the law. I rejected a residential lease myself and I'm still not sure it's actually terminated.

[JRScott]

Obviously Georgia Tenant Law and Eviction law are not my area of specialty.

http://www.rentlist.net/LTlaw.htm

http://www.rentlist.net/LTevict.htm

A few questions arise from this.

By 44-7-7 it appears that at least 60 days notice is needed to be given to you by the landlord, but this is also limited to tenancy at will from 44-7-6.

From what I've read and I"m no expert if he's given you the 60 day notice then he is within is right. If you've not paid the rent and he's filed under 44-7-50 to 53 and met the obligations required he's within his right.

Basically he'd need to start eviction proceedings against you.

Whether it happens now or later though it would probably be in your better interest to seek out other accomodations. But if you can get that 60 day timeframe into place you might can get another place in that time.

Did he list you on his bk petition as a possible creditor?
Did you pay him a security deposit?

[kascls]

We paid first and last month at inception. We paid through Novemebr, his meeting of the creditors was in November, then continued to 12/12/08. Pacer showed the meeting was held and no ammendment was made to the original intent to surrender the house.

On one hand, it seems like he would have a hard time with an eviction process since he is surrendering the house, and I assume by then the bank would have started forclosure. On the other hand, if we made a rent payment, wouldn't it go to the trustee?

It seems like the house is in limbo until the bk and foreclosure runs it's course. As I stated, we'd like to negotiate a purchase with the bank. When I contacted them, they advised me to sit tight until the dust settles. In the mean time, I am looking for another place, though I hate the thought of moving again. We are paid through November but December hasn't been paid. I didn't want to pay the landlord since he is giving up the house, besides we may need that money to pay for our move.

[JRScott]

Considering he took first and last months rent as deposits then Dec could be considered using your last month's deposit. That or you'd have a claim against his bk estate for the deposit.

[shabam]

I wonder if you could make a claim against your deposit. I would look at contacting their trustee and stating that this person has your deposit and that they were advance payments to him.

The interesting thing is, could it be considered that the owner took on debt within 90 day prior to filing. The months paid in advance, the deposit, is money that could technically need to be paid back to you the tenant.

I am no lawyer so I an only going on my opinion but surely you must have some type of claim against him.

[StartingOver08]

I wonder if you could make a claim against your deposit. I would look at contacting their trustee and stating that this person has your deposit and that they were advance payments to him.

The interesting thing is, could it be considered that the owner took on debt within 90 day prior to filing. The months paid in advance, the deposit, is money that could technically need to be paid back to you the tenant.

I am no lawyer so I an only going on my opinion but surely you must have some type of claim against him.

Well, so the tenant has not paid Dec 2008 rent (rightfully so BTW) and has a last month up with the landlord that would cover Dec 2008 - you want the tenant to file a claim for the paid last month? Doesn't make a lot of sense to me when the tenant has already used that month for Dec 2008.

The landlord still owns the property, but it is now in a BK estate. If the tenant needs a month or so or even more, he has time to put together additional funds to move to another place. No one has asked for the money yet. The Trustee is in a position to ask the tenant to pay rent to the BK estate. So the tenant needs to set aside funds anyway just in case the Trustee says: Ok, you can stay for x months but you pay the BK estate rather than the Landlord.

Sounds like the tenant is on even ground right now financially. The tenant may want to move for peace of mind. But to file a claim right now seems to be "much adu about nothing". JMO