Thursday, February 28, 2013

Rent-Stabilized and Rent-Controlled Leases in Chapter 7 bankruptcy

We received a tremendous response to our Cooler e-mail "Covet Thy Neighbor's Apartment," which discussed the attempts of Chapter 7 Bankruptcy Trustees to assume and assign rent-stabilized and rent-controlled leases for the benefit of creditors.

We believe that the following factors are important in determining whether a Chapter 7 Bankruptcy Trustee will attempt to assume and assign the lease to a rent-stabilized or rent-controlled apartment:

1. How many years has the Debtor lived in the apartment?

2. How much rent is the Debtor paying under the rent-stabilized or rent-controlled lease, and what would be the market value rent if the apartment was vacant and not rent-stabilized or controlled?

3. Is the apartment in a gentrifying area or an upscale neighborhood?

4. Has the apartment building recently undergone a condo or co-op conversion?

5. If yes, did the Debtor decline to buy the unit, and therefore become a non-purchasing tenant?; and

6. If the Debtor is married, did the Debtor's spouse also file for Chapter 7 bankruptcy protection?

If you're considering bankruptcy and have a rent-stabilized or rent-controlled apartment, you should contact Jim Shenwick.

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