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If a person files bankrupt... and they have a long term lease

 
Dave Kennett's Avatar
  • Answered by:Dave Kennett
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Customer Question

If a person files bankrupt... and they have a long term lease and it has been listed. Is the owner allowed to enter the business witha deputy and serve a three day eviction notice? without going threw bankrupt att.

 

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State/Country relating to Question: Missouri

Submitted: 896 days and 16 hours ago via Cornell Legal Info Institute.
Category: Real Estate Law
Value: $48
Status: CLOSED
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Expert:  Dave Kennett replied 896 days and 16 hours ago.

-Could you explain your situation a little more?
Who is filing bankruptcy, tenant or landlord?

What has been "listed"? Is the real estate for sale?

Customer replied 896 days and 16 hours ago.

I purchased a Salon with equipment. The person I purchased it from filed bankruptcy on the lease that the business resided in. The landlord entered the premises during working hours with a Missouri Randolph County deputy and served my employee with a 3 day eviction. The empoyee was the person I purchased the Salon Bussiness from. When I was notified, I approched the landlord to continue the rent, he refused and said out in three days. He also said I couldn't not remove any of the equipment I had purchased. I did hire some of my empoyees and we moved the night before thanksgiving. Her bankruptcy att. has not gotten back with me. Was there any law violation on the landlord for not going threw att?

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Expert:  Dave Kennett replied 896 days and 16 hours ago.

-Could you explain your situation a little more?
You say you "bought the business" but did you get anything such as an agreement from the landlord to assume the lease or permission from the landlord to sublet the premises?

Do you know if the owner filed for a "relief from stay" in the bankruptcy case?

Was this a written lease?

Customer replied 896 days and 16 hours ago.

I approached the landlord about 9 months ago and explained to him I had purchased the business and probably needed to amend the lease. He never responded with a agreement. So i just continued paying the lease in person every month. He never complained as well as I. Just continued business as usual. Not recalling what a relief of stay means.

Keep in mind I was not one minute late with the rent. So now I am just about out of business myself. I have had to find temp. space from my competitors for my employees.

Accepted Answer

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Expert:  Dave Kennett replied 896 days and 16 hours ago.

When a bankruptcy is filed there is a "stay" placed on all creditors of the person filing a bankruptcy from trying to collect. So if a creditor wants to pursue collection they must file what is called a "relief from stay" in the bankruptcy court in order to proceed against the person who filed bankruptcy. If this landlord did not file a relief from stay he had no right to evict or to take equipment or to do anything and he is in violation of Federal law.

 

The problem is that you do not have standing to complain since you are not the person who filed bankruptcy and you do not have a lease. Your employee would have to be the person to complain or to file anything in the court. You may have bought the business but the lease is with the former owner. If you took the equipment out that you purchased then I see no problem with that but you cannot claim a lease agreement if another written lease exists.

 

If the lease is paid up then the landlord is completely out of bounds to do what he did, bankruptcy or no bankruptcy but your employee and former owner is going to have to be the one to take action since you have no contract with the landlord. All of this involves rather complicated areas of both real estate and bankruptcy law and you probably will need an attorney to sort through all of the details.

 

Dave

Expert TypeLawyer
Category: Real Estate Law
Pos. Feedback: 98.7 %
Accepts: 4568
Answered: 12/2/2010

Experience: 25 years experience

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