Whether you are a tenant or a landlord, there are several reasons why you may require legal counsel. You may mainly need legal counsel when facing intricate bankruptcy and eviction issues. This is where a landlord-tenant bankruptcy lawyer comes in. A Bankrupty attorney will help to analyze your situation and consider all your legal options. With the right legal counsel, you will understand your rights and make a decision that will protect your rights. Los Angeles Bankruptcy Attorney provides the best legal counsel for Landlords and tenants.

Common Landlord-Tenant Issues

Legal issues that affect landlord-tenant relationships come in many forms.  Some of the most common problems are:

  • Landlord-tenant disputes related to rental rates
  • Eviction issues
  • Rental and lease agreements
  • Commercial real estate issues
  • Discrimination issues
  • Bankruptcy issues

Bankruptcy and Eviction

When a tenant files for bankruptcy, a landlord has to take several steps to protect their rights. A landlord’s actions will depend on whether the tenant files for bankruptcy before or after the eviction judgment.

Initially, tenant bankruptcy would prevent a landlord from implementing a court-ordered eviction. A tenant would file for bankruptcy even after an eviction judgment and could hinder the landlord's ability to implement the eviction. A tenant would halt the eviction process by filing for Chapter 7 or Chapter 13 bankruptcy. An automatic stay took effect once a tenant filed for bankruptcy, and it prevented creditors, landlords included, from pursuing the debt repayments.

However, circumstances changed in 2005 after the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act. With the passage of this law, a landlord can evict a tenant irrespective of the automatic stay. As long as the landlord had a court order eviction before the tenant's bankruptcy, an automatic stay can't prevent an eviction. A landlord can simply ignore the automatic stay and continue with the eviction as advised by the court.

However, an exemption exists under California law. The law may allow a tenant to remain in a property even after an eviction judgment. However, the tenant would have to continue paying rent while at the apartment. However, some states in the U.S. do not allow this exemption. Some of the steps that a tenant can take to avoid an eviction are:

  • The tenant files a sworn statement or a certification with the bankruptcy court. The statement should outline that the law allows the tenant to remain in the rental unit and pay the delinquent rent even after the eviction judgment.
  • The tenant deposits all the rent that will be due within thirty days after filing the petition. The tenant deposits the rent amount with the bankruptcy clerk.
  • The tenant serves the landlord with a copy of the certification.

After filing the certification, the tenant will have thirty days from the filing date to deposit all the delinquent rent. If the tenant manages to pay all the outstanding rent, they file a second certification and give the landlord a copy. If the landlord objects the certification, the bankruptcy court holds a hearing within ten days to discuss the objection. If the bankruptcy court rules in favor of the landlord, it lifts the automatic stay, and the eviction takes effect.

Lifting an Automatic Stay

The landlord may not initiate the eviction process if the tenant has already filed for bankruptcy. An automatic stay takes effect immediately if a tenant files for bankruptcy. The automatic stay prevents a landlord from evicting the tenant or issuing a termination notice. However, there's a way around this limitation. A tenant can request the federal bankruptcy court to lift the automatic stay. This would allow the landlord to continue with the eviction. In most cases, the court will lift the automatic stay since it does not affect the tenant's estate value.

In some instances, a landlord may continue with the eviction without requesting the court to lift the automatic stay. A landlord may implement the eviction if there are illegal drugs in the property or if the property is endangered. A landlord would have to file a certification with the bankruptcy court. The certification should state that the basis of the eviction is the illegal use of drugs within the property or endangerment of the property.

If a landlord intends to carry out the eviction after the tenant's bankruptcy, the landlord should provide the bankruptcy court with a certification. The certification should state that there was illegal drug use within the property or endangerment of the property within the past thirty days. After filing the certification with the court, the landlord must serve the tenant with a certified copy.

If the tenant does not file an objection after receiving the certification, the landlord can proceed with the eviction within 15 days. If the tenant objects, the court will hold a hearing within ten days of the objection. However, the court will allow the landlord to continue with the eviction if the tenant does not prove that the landlord's statement was true. If the tenant proves that the situation has been remedied or that the landlord's statement is false, the court may stop the eviction.

Filing for bankruptcy will provide temporary relief for a tenant by allowing him or her to stop an eviction temporarily. Filing for bankruptcy may give a tenant some time to accumulate the past rent dues. A tenant will also have more time to negotiate an agreement with the landlord. However, for a tenant to prevent eviction by filing for bankruptcy, they have to act fast. You may only be able to prevent eviction through bankruptcy if:

  • The eviction process has not progressed too much at the time of filing for bankruptcy.
  • California state laws allow you to pay the rent owing to avoid an eviction.
  • The landlord did not quote drug use or property endangerment in the eviction property.

Bankruptcy Options for Tenants

Tenants may choose to file for Chapter 7 or Chapter 13 bankruptcy under California law. Business entities may file for bankruptcy under Chapter 7 or Chapter 11. Chapter 11 bankruptcy is almost similar to Chapter 13 bankruptcy because it reorganizes the debt and allows the debtor to pay through a repayment plan. In some instances, the court may convert a Chapter 11 bankruptcy into a Chapter 7 bankruptcy.

Irrespective of whether a tenant files for Chapter 7, Chapter 11, or Chapter 13 bankruptcy, a landlord is entitled to accrued rent. Rent receives a high priority of payment because it's an administrative expense. However, to ensure payment, a landlord must file a timely claim with the bankruptcy court.

Chapter 7 Bankruptcy

When a tenant files for Chapter 7 bankruptcy, the bankruptcy removes or wipes away the most unsecured debts. Unsecured debts include credit card debts and medical bills. A debtor will not have to repay the unsecured debts through a repayment plan. For a tenant to qualify for Chapter 7 bankruptcy, they will have to meet certain criteria. You may not be able to file for Chapter 7 bankruptcy if your income is above a certain threshold.

Immediately after filing for Chapter 7 bankruptcy, the automatic stay will prevent creditors from conducting collection efforts against the debtor. Therefore, the landlord may not be able to continue with the eviction. The bankruptcy court selects a bankruptcy trustee who administers the tenant's case. If you had fallen behind the rent payments before filing for bankruptcy, the law does not allow the landlord to evict you during the bankruptcy process. The automatic stay will stop all the collection actions against you. If the landlord intends to pursue the rent collection, they will have to seek relief from the bankruptcy court.

The trustee may sell some of the debtor's properties to pay off the outstanding debts. The trustee will only sell the debtor's non-exempt properties.  Therefore, the creditors may not receive anything if the tenant does not have non-exempt property.

It's important to note that filing for Chapter 7 bankruptcy does not terminate or breach the lease agreement. Therefore, a landlord can't evict a tenant for seeking bankruptcy protection. When a tenant files for Chapter 7 bankruptcy, the bankruptcy trustee will have up to 60 days from the filing to decide whether the tenant should keep the lease. If the trustee allows the tenant to continue with the lease, the law allows the landlord to request proof that the tenant can meet future rent payments. If the tenant can't provide the proof, the landlord may request the bankruptcy court to terminate the lease agreement. The landlord may also request for the termination of the lease agreement if the tenant falls behind on rent payments.

Chapter 13 Bankruptcy

Under Chapter 13, bankruptcy in California, the debtor will have an opportunity to terminate or keep the lease. However, a tenant has to decide before the confirmation of the repayment plan under Chapter 13 bankruptcy. The landlord may request the bankruptcy court for a specific date when the tenant should have made the lease decision.

  • If the tenant rejects the lease - The tenant may reject the lease after filing for Chapter 13 bankruptcy. In this case, the tenant will owe the landlord any outstanding rent and other damages according to the lease terms. For the landlord to recoup the money, they have to prove the claim to the bankruptcy court. The proof of claim should outline the debt details. The amount that the landlord receives will depend on the tenant's debts. The tenant will first pay the priority debts. The payment that the landlord receives will also depend on the money available to pay the claims.
  • If the tenant decides to assume the lease - The tenant or the bankruptcy trustee may choose to assume the lease under Chapter 13 bankruptcy. In this case, the tenant will have to cure the outstanding rent debt promptly. Most tenants will include the rent arrears in their debt repayment plan. Therefore, the rent arrears will be paid alongside other debts over a repayment period of several years. The landlord can challenge the repayment plan by arguing that promptly means that the rent arrears should be paid immediately and not spread over a repayment plan.

Under Chapter 13 bankruptcy, the landlord may request the bankruptcy court to treat the outstanding back rent as an administrative claim.  The claims are part of the Bankruptcy Abuse Prevention and Consumer Protection Act introduced in 2005. Creditors can claim payment for the goods and services that a debtor received within 20 days from filing the bankruptcy. Therefore, the landlord may claim the outstanding rent for the past 20 days before the tenancy bankruptcy. Thus, in the conversion of Chapter 13 bankruptcy to Chapter 7, a landlord will have an advantage or a higher priority than other unsecured debts.

Under the Chapter 13 bankruptcy repayment plan, the landlord may request the bankruptcy court to garnish the tenant's wages. The bankruptcy trustee will receive the money and forward it to the landlord. If the tenant fails to keep up with rent payments outlined in the repayment plan, the law allows the landlord to evict the tenant.

What an Automatic Stay Can Do

If rent is due and the tenant files for Chapter 7 or Chapter 13 bankruptcy, the landlord will not do much. However, a landlord may have more power if the tenant rejects the lease. Landlords must be careful to avoid violating the provisions of an automatic stay because this could have repercussions. Some of the actions that a landlord should not take when an automatic stay has taken effect are:

  • Issuing demand letters or making phone calls to demand past-due rent from the tenant
  • Making personal visits to the tenant and requesting for rent payment
  • Filing an eviction suit against the tenant
  • Using the tenant's deposit for past due rent

However, it's important to note that an automatic stay will not prohibit all forms of contact with the client. For instance, even after an automatic stay takes effect, the landlord will still be able to:

  • Issue the tenant with the current or recent rent statements
  • Require safety and health compliance
  • Sign a new lease agreement with the tenant
  • Issue reminders for current rent
  • Charge penalty fees for late rent payment
  • Offer pest control services and carry out other routine maintenance activities

When to Hire a Landlord Tenant Lawyer

Most people will rent property at some point for business or individual use. Landlord-tenant law revolves around the leasing of commercial and residential real estate. When entering into rental agreements, landlords and tenants agree and sign lease agreements. A lease agreement outlines the obligations, rights, and expectations of both the landlord and the tenant. If issues arise between a landlord and a tenant, a landlord-tenant attorney comes in handy to resolve the differences.

From a tenant's point of view, it would be advisable to hire a landlord-tenant attorney when:

  • A landlord attempts to evict you for reasons that are not outlined in the lease agreement. You can also contact a landlord-tenant attorney if the landlord attempts to remove you from the rental unit for reasons that are against the law.
  • If a landlord violates your privacy repeatedly, you should contact a landlord-tenant attorney. You should contact an attorney if the landlord keeps accessing your business or your home without your consent.
  • A tenant should contact a landlord-tenant attorney if the landlord fails to honor the terms of the agreement. For instance, a landlord has to ensure that the rental property is in good condition and should not allow it to deteriorate.
  • A tenant should contact an attorney if the landlord attempts to evict him or her from the property after tenant bankruptcy.

A landlord-tenant attorney comes in handy in case landlords and tenants are unable to work out their differences.

From a landlord's perspective, a landlord-tenant attorney can help you if:

  • A tenant fails to pay rent and fails to respond to the landlord's demands for rent payment.
  • When a tenant files for bankruptcy and has not paid up the overdue rent bills
  • When a tenant conducts illegal activities, including drug dealings or other activities that could endanger your apartment
  • When a tenant breaches the lease agreement and fails to respond to the tenant's demands

Most landlords and tenants will iron out the differences between them before contacting a landlord-tenant attorney. Most landlord-tenant attorneys charge a flat fee for their services. For instance, an attorney may charge a flat fee to file a certification to either a landlord or an attorney. However, the dispute, especially in cases of tenant bankruptcy, may escalate and require court intervention. In this case, a landlord-tenant attorney may charge hourly fees for their services. However, competent and experienced attorneys keep their fees reasonable and still provide exceptional legal services.

Find a Los Angeles Bankruptcy Attorney Near Me

Most people find it hard to understand bankruptcy issues that affect tenants and landlords. For instance, most landlords do not understand their rights or the steps to take when a tenant files for bankruptcy. On the other hand, tenants may not understand their rights after filing for bankruptcy. This is where a landlord-tenant bankruptcy lawyer comes to provide the best legal counsel. Los Angeles Bankruptcy Attorney provides the best legal representation in landlord-tenant bankruptcy issues. Contact us at 424-285-5525 and speak to one of our attorneys today.