Legal Question in Bankruptcy in Maryland

Re: Landlord & Tenant in Bankruptcy

It depends whether your lease is commercial or residential, and what chapter bankruptcy is filed.

With commercial (i.e., non-residential) leases, the lease is deemed rejected 60 days after filing unless the trustee (or debtor-in-possession) moves to assume it. To assume a lease, all rent has to be brought current. If there has been a default, the trustee or DIP has to provide adequate assurance of future performance. The 60 days can be extended by court order.

With residential leases, in Chapter 7, if the trustee does not assume within 60 days, the lease is rejected, but there is no such provision as to the other chapters, so the lease continues in limbo until someone acts.

Whether or not a lease is rejected, you need to obtain relief from the automatic stay to evict a tenant.

This area of the law can be tricky, so you should consult with an experienced bankruptcy lawyer before taking any action against a bankrupt tenant, but you should do so quickly so as not to jeopardize any rights you may have.

Daniel Press

Chung & Press, P.C.

6723 Whittier Ave., Suite 302