Legal Question in Real Estate Law in California

paying rent after property owner files ch 7.

the owner of the property i currently lease filed for ch 7 two weeks ago. he meets with creditors and trustee on april 23rd. i've been pre-approved to buy the property, and have contacted the trustee in writing (cc-ing my lender and the property owner's attorney) expressing my desire to submit an offer for a short sale. i was originally supposed to continue to pay rent to the property management company, who would hold it for the trustee. the owner just emailed saying that he's terminated his relationship with the prop mgmt co, and that i am welcome to keep the rent to use for what i want.

this is just too easy, yes? will i still be protected by california's 90 day statute if the short sale falls through and the bank files foreclosure? in other words, will not paying rent to anyone leave me vulnerable to immediate eviction if the short sale doesn't go through?

thanks!


Asked on 3/30/10, 6:10 pm

2 Answers from Attorneys

You need to work with the U.S. Trustee on this. The owner no longer has any right to say what you do and do not do about rent.

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Answered on 4/04/10, 6:21 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Mr. McCormick is mostly right. The owner has, by filing bankruptcy, turned over all rights and authority over his former property to the bankruptcy trustee (not the U.S. Trustee). The owner no longer is in any position to hire or fire property managers. His "property manager" is the bankruptcy trustee assigned to this case. The U.S. Trustee is kind of an overall supervisor of the court and its cases, but as I understand it is not likely to be involved in the nitty-gritty of individual cases unless unusual problems surface.

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Answered on 4/04/10, 8:59 pm


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