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.
Posted by James Shenwick