Legal Question in Real Estate Law in California
Owner intends to break year lease due to bankruptcy
We signed a 1yr lease in 11/00. In 12/00, one of the owners called and stated that they intended to sell the house by 1/31/01 because he was filing bk. We would have 60 days from the sale date to vacate and they ''were going to make sure we got into another place.'' He also offered me $1,000 AND my deposit back-which I neither accepted nor declined. This was a verbal conversation; nothing has been sent in writing and there is nothing in the rental agreement about breaking the lease before it ends.
My rent is 780 per month. The reason we signed the 1yr lease was the rent price was so good and we wouldnt have to move. In the rental section of the paper recently, I couldnt find a comparable (no better/worse-same area) home to rent for under 1100.
Does the landlord have a right to break the lease under these circumstances? What compensation is the landlord required to give? What are the landlords responsibilities in ''making sure we get into another place?� Do I have any guarantee to pay no more than 780 in rent for the rest of the lease and they supplement any increase? Thanks.
1 Answer from Attorneys
Re: Owner intends to break year lease due to bankruptcy
I am a business lawyer, not a bankruptcy expert, but my understanding of the Bankruptcy Code is that a tenant is not deprived of the right of possession under an unexpired lease, but the bankrupt landlord is relieved of his duty to provide collateral services such as heat, utilities, property maintenance, etc. See U.S. Bankruptcy Code section 365(h). If you want to remain in the house and can provide the services yourself, see a bankruptcy lawyer for a one-hour consultation and if he/she agrees with me you should be in a position to call the landlord's bluff.
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