Legal Question in Landlord & Tenant Law in California

Re: Owner to file bankruptcy

You have excellent answers from my colleagues. Follow their advice!

Re: Owner to file bankruptcy

They have not filed yet and the process will take at least several months. If they are filing just to reorganize what their debts are, then they will continue to own the property. If they are filing to eliminate all their debts, then they end up putting all their assets except for a few exclusions [does not apply to a rental] into a pot for their creditors to divide. Someone will be appointed to do that; until the house can be sold, that person will be happy to have someone paying the rent and not having the place vacant. By the time there is a new owner, your lease will likely be up.

So have the landlord keep you updated as to what is happening and when various steps are likely to be completed. Consider that the new owner may raise rents, unless you are under rent control rules.

Re: Owner to file bankruptcy

State lawmakers also are working on passing a law that would prevent new owners of homes foreclosed upon to evict good tenants.

If new owners come in, they might just want to keep you as a tenant if you have a good history of paying rent. It's always better to have good tenants than to have the property vacant and falling into disrepair. So, once you know who the owners will be, communicate with them and see what you can work out.

I agree with Mr. Shers that, as soon as you find out that a bankruptcy has been filed, contact the bankruptcy trustee's office and/or your landlord's lawyer and find out to whom you should pay your rent.