Stay Of Residential Evictions Under New Bankruptcy Law

I received the following email from a landlord (creditor) concerning a tenant who filed bankruptcy on the eve of eviction.

"I got my final judgment for possession count 1 only Sept. 4 my tenant went to file bankruptcy September 5 to avoid the eviction. I got a call from the West Palm sheriff telling me there was a stay on them serving him the 24 hour they were to do that day Sept. 5. I was in disbelief that this guy could not pay rent just because he was now protected because of this bankrupt. "

Under the facts presented the bankruptcy probably will not stop the eviction.

The new bankruptcy law made it much harder for a tenant who has not paid rent to stop an eviction by filing bankruptcy. In many cases residential evictions are an exception from the bankruptcy stay. The general rule under the new law is that the eviction of a debtor from his residence is not stayed by bankruptcy is the lessor has obtained a judgment for possession prior to the bankruptcy filing. There are exceptions. The stay exception (no stay applies) is limited to actions seeking possession of the property or to exert control over the property. A landlord’s action to seeking a money judgment against the debtor is stayed by bankruptcy. Also, notwithstanding the general stay exception, a debtor may obtain a automatic 30 day stay by filing a "certification" that the debtor has a right to cure the monetary default under the lease and the debtor has deposited past due rent with the bankruptcy court.

Residential evictions are complicated under the new bankruptcy law. Landlords should make sure their real estate attorneys understand and fully explain the new law so they do not inadvertently violate a bankruptcy stay.

posted by Jonathan Alper, bankruptcy and asset protection attorney, Orlando, Florida

Comments

[d]

Hello:

Any ideas on an interesting scenario? Tenant hasn't paid full rent since prior to Oct 09.
1. 3-day defective notice filed.
2. Voluntarily dismissed defective notice
3. Filed month to month termination notice, gave 30-notice (actually approx 45 days) lease-CA but house/landlord/tenant in FL
4. Judge said show case law that shows #1 & 2 wouldn't be confusing to tenant and required tenant to post rent by today. Showed case law per request to judge, tenant filed bankruptcy following day, which was the day prior to rents due into court registry.
5. Tenant Filed Bankruptcy prior to day Judge Required Rents due into court registry- significant rents due!
6. Judge never saw addendum to 5-day notice stating tenant has denied showing of rental, denied copy of working key, acknowledge bad checks above and beyond requested rents in notice
Does anyone know if I have rights (case law) that superceed bankruptcy when tenant obviously used bankruptcy as a timing mechanism to not pay rents further.

Additional information
5-day notice complaints weren't noticed between timeline of 3-day defective notice and lease termination letter during ct apt, which noted that the tenant had refused entry, refused copy to working key to home, +++
If a lease has CA as ruling law and defense stated case ex's in FL & CA (house and landlord - in FL), can you use both states, and in either case, if there is intentional default (have examples) on rents due b/c of timing of bankruptcy, do you know of any examples case results?