Legal Question in Real Estate Law in Pennsylvania
Landlord Bankruptcy
I recently discovered my landlord has filed for bankruptcy. He did not disclose thisto me, I found out by a past due notice for sewage payment in which he never forwarded the bills to me and I had to pay additional, late charges(different issue). I gave him written notice of our intent to leave approximately 3-4 days before finding out he was going to declare bankruptcy. I have two month's left on my lease due to the two months notice agreement within our lease. The rental agreement was changed to month by month for the second year of the lease. I provided him with a security deposit of one months rent along with the final months rent. This means I have one final rent payment to pay. What are my rights? Do I have to pay that final rent if I know he is declaring bankruptcy and I will more then likely not be able to collect my deposit? In addition, does his declaring bankruptcy in any way break our lease agreement? If possible I would move out earlier then two months if the lease could be broken due to the bankruptcy, and this would save me from having to make this payment when I know I will not be able to recoup my deposit.
1 Answer from Attorneys
Re: Landlord Bankruptcy
There are two consequences for failure to pay rent: 1) withholding of the security deposit to compensate for the missed payment; 2) late charges. Thus, you may owe him money over and above the security deposit which he should apply to the missed payments.
The fact of his filing bankruptcy does not relieve you of your obligation to pay the rent, unless he takes action known as a rejection of the lease. He will likely not do that, especially when you have given notice of termination.
I do not disagree with withholding the rent and waiting to see what happens. However, you should try to save the amount that you may be obligated to pay. Also, your failure to pay rent on a timely basis, even to a landlord in bankruptcy, could effect your credit. In that event, you may also add a comment to your credit report to explain the circumstances.
I trust this has been helpful, but feel free to call or e-mail with any questions.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
