Rental Lease questions

[pgadams]

I have a tenant who is $1300 behind on rent.
They filed chap 13 on May 15, 2009, then converted to chap 7 on June 15, 2009. Since the filing, rent has been paid each time on time.
The current lease expires August 31, 2009.

From my research, I think the current lease needs to be accepted/rejected by the Trustee/Tenant within 60 days of filing. If accepted, then all back rent needs to be brought current?

Has anyone had any experience with this situation?
Thanks!

[justbroke]

From my research, I think the current lease needs to be accepted/rejected by the Trustee/Tenant within 60 days of filing. If accepted, then all back rent needs to be brought current?

Absolutely. Did they list you as a creditor? You know there are very specific rights to landlords in these situations... especially if you were already in an eviction process. Since they are current post-petition (well in post-petition payments that were due), they may be okay. If they assume the lease (keep it), then they'd have to cure all defaults from what I know.

You may want to seek an attorney who specializes in leases and bankruptcy. You probably need to stay on top of this, since the 60 day expires on July 15th.

Has anyone had any experience with this situation?

My tenants moved out before it became an issue.

[pgadams]

Yes, this is different in that they are continuing to stay.
And yes, I'm listed as a creditor and submitted the "Proof of Claim" and the lease with it.
An eviction was started, but there wasn't a judgement/ruling in local court - so it was stoped by the automatic stay. Under chap 13, the back rent was to be paid back in payments, but then it was changed to chap 7, which back rent is discharged. That makes sense if they are moving. From what I can tell, the intentions are that they want to stay, but unless the back rent is paid, I don't feel real compelled to renew the lease, which I think fair is fair.

I guess I'm wondering if the trustee is supposed to contact us concerning the lease or do I need to initiate that?

[justbroke]

I guess I'm wondering if the trustee is supposed to contact us concerning the lease or do I need to initiate that?

I might consult an attorney specializing in residential leases and bankruptcy. If I recall correctly, and not saying that I do, if you actually initiated the proceeding, you can ask for a Motion for Relief from the Automatic Stay to continue the proceeding.

I believe that the Automatic Stay 362 seeks to not only temporarily stay certain judgments of eviction, but doesn't preclude you from seeking relief from the automatic stay.

Also, I don't think the Trustee will even get involved.

[pgadams]

I can file for Lift of Stay, at an additional cost of $500. Things are tight for me also, and its a matter of am I throwing good money after bad. I believe that the back rent is already gone and I won't recover it since they filed. I can't afford to allow them to stay for free and was just hoping that the stay would be lifted so that I have the option to move for eviction. As long as rent is paid, I'm OK with it, but was wandering what to expect from all of this.

[justbroke]

I can file for Lift of Stay, at an additional cost of $500. Things are tight for me also, and its a matter of am I throwing good money after bad. I believe that the back rent is already gone and I won't recover it since they filed. I can't afford to allow them to stay for free and was just hoping that the stay would be lifted so that I have the option to move for eviction. As long as rent is paid, I'm OK with it, but was wandering what to expect from all of this.

The Lift is $150. I fully understand though what you mean by just waiting it out. The stay isn't lifted until the case is closed. It can be 4-5 months from case filing to case closing. If they are paying on time, then fine.

I would just keep an eye out and make sure that they don't reject the least. There are some procedure issues here as I'm not sure if the Stay is automatically lifted for that lease, if they reject the lease. Most prudent creditors always file the motion for relief just to be certain.

If they don't pay on time on July 1st... that will be your clue that they probably don't intend to pay anymore. Keep up on this!

[pgadams]

They happen to be on a week to week rent payment, which is something that came up in order to work with them per judges orders. I've done what I was ordered and now I'm in the middle of this.

The filing fee is $150, but the attorney wants $350 to write it up. I tried to research to see if I could write the Motion to Lift Stay myself, in order to save, but it appears to be more complicated than just asking it to be lifted.

That was what I was wondering, if the lease is rejected, is the stay automatically lifted or do I need to wait until the case is closed?

I guess that is what it comes down to that I'm wondering, is when at what point is the stay lifted?

[justbroke]

That was what I was wondering, if the lease is rejected, is the stay automatically lifted or do I need to wait until the case is closed?

I believe the Stay is still intact until the case is closed.

I guess that is what it comes down to that I'm wondering, is when at what point is the stay lifted?

When the case is closed, or a motion for relief from stay is granted, whichever comes first.

[pgadams]

I was able to locate this and others similar to it:

Property Leasing:
• In Chapter 7 case property lease not assumed within 60 days of filing date is deemed rejected; in Chapter 11 & 13 case debtor has until confirmation to assume or reject
• Assumption of property lease requires cure in full of all monetary and non-monetary defaults
• After lease rejection, leased property no longer property of the debtor’s estate and thus lessor allowed to pursue state law rights to take back leased property without need for relief from stay

So it appears that 60 days from the filing date I would be able to persue eviction in local court without Lift of Stay order, if needed. I also found out that any rents past due are immediately "dated" back to one day prior to filing, which makes them part of the debtors debts, and is therefore uncollectable - although there are things said about a portion of it may still be enforcable, so I don't want to lead someone astray in thinking that they can just stop paying rent. In my case, I'm not concerned with that though so I'm not looking into any further than this. I'm just concerned about knowing what I can do if I need to, and others would also maybe gain understanding.

[justbroke]

What was on their statement of intentions? Did they mark it as assume or reject?

[pgadams]

I haven't seen any statement of intentions. I haven't heard anything concerning acceptance or rejection. At this point, as long as rent is being paid I'll let it be - July 15 isn't to far off. My concern was if rent stops being paid what I could do because I have all I can do to pay the mortgage and utilities on the place now with rent being paid. When they fell behind on rent I was behind on mortgage for a while but now got it caught back up. The back rent is gone, I understand that and have accepted that, but I can't do it again. So as long as they continue to pay, I'm fine with it. From talking with them it seems they want to stay. Another tenant that knows them has said they expressed they want to stay and that is what I think as well - but then you never know.....

So I guess I'm supposed to receive a statement of intentions then? I haven't received anything yet. I guess they have until July 15, which is 60 days from filing.

[justbroke]

So I guess I'm supposed to receive a statement of intentions then? I haven't received anything yet. I guess they have until July 15, which is 60 days from filing.

I believe the Statement of Intentions is to be submitted within 30 days after filing. I don't think they have to serve that on you. Do you have PACER?

Anyhow, I would just keep on top of this... just in case.

[pgadams]

I do have PACER and use it to keep updated.

The case was converted to chapter 7. Chapter 7 allows 60 days to accept of reject the lease. Does anyone know if the 60 days is from the day of the initial filing or is it from the day of conversion? The 60 days from the filing has passed, the 60 days from conversion has not.

[justbroke]

I do have PACER and use it to keep updated.

The case was converted to chapter 7. Chapter 7 allows 60 days to accept of reject the lease. Does anyone know if the 60 days is from the day of the initial filing or is it from the day of conversion? The 60 days from the filing has passed, the 60 days from conversion has not.

It's probably from the date of conversion, since they also get a new 341 Meeting (if they hadn't previously converted from a Chapter 7 to a Chapter 13).