Good News for Landlords - Bankruptcy Law Revisions Make it Easier to Evict

justinIt can be tough being a landlord in Massachusetts. In addition to the everyday hassles, such as dealing with ornery tenants and rent collections, there are also long term considerations, such as contemplating lease modifications and default problems, as well as working to maintain high occupancy rates. In addition, landlords often feel that eviction and bankruptcy laws are stacked against them and impede their ability to quickly evict in case of default. The good news for landlords is that as of October 2005, things seem to have gotten a little easier. The passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) has had a profound effect on the bankrupt tenant/landlord relationship in both the residential and commercial world.

As every residential landlord knows, obtaining a judgment for eviction can be an extremely trying and expensive proposition. Under the old bankruptcy law, nothing would frustrate a landlord more than finally obtaining an eviction following months of litigation, only to have the tenant file bankruptcy, thus invoking the automatic stay and halting the eviction process. Despite sometimes months of legal wrangling (and likely non payment), tenants could immediately stop and delay a hard fought eviction.

Now, under BAPCPA, if a residential landlord has a judgment for possession by the time the tenant files for bankruptcy, the stay does not prevent the landlord from continuing to evict the tenant 30 days after the petition was fielded. An exception applies only if the debtor has a right to cure a deficiency in rent, and actually has cured the deficiency by depositing all of the rent with the clerk of the Bankruptcy Court within 30 days of the bankruptcy filing. In a majority of cases, it is likely that a debtor's financial distress will prevent any cure, thus permitting the landlord to move forward with...

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by: Justin H. Dion, Esquire

BusinessWest
May 1, 2006

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