Commercial Landlords & Tenant Bankruptcy
Tenants filing for bankruptcy is less of an issue for residential landlords, but an increasingly frustrating problem for commercial landlords as we get further into 2018. As a result, it is important—now more than ever—that commercial landlords know what their rights are when it comes to how tenant bankruptcy affects lease agreements. Rules: Before & After Filing for Bankruptcy First and foremost, it is crucial to understand that, once a tenant files for bankruptcy, landlords and other parties are prohibited from taking any action against the tenant (i.e. debtor) unless it is first approved by the bankruptcy court. However, if a tenant is in default prior to filing for bankruptcy, and the landlord takes every step required under state law to terminate the lease before they file, the lease is then not subject to the tenant’s bankruptcy case. This is because it is the act of the tenant filing for bankruptcy that imposes an automatic stay against any actions by landlords and other parties (where actions are any activities involving collecting, demanding, or otherwise seeking to recover amounts due). This is why it is wise to work with a landlord-tenant attorney as soon as a tenant/debtor falls behind on rent payments. While tenants are required to pay for any and all rent that accrues after the bankruptcy filing (in a timely manner), rent that accrued prior to filing is what’s known as an “unsecured claim”: it might not be paid until much later in the bankruptcy, if at all. If/once the tenant falls behind on any post-filing rent, the landlord can file a motion seeking permission to pursue default and eviction. Tenants Re-assigning Leases to Third Parties Perhaps most importantly, when it comes to commercial landlords and tenants and bankruptcy filings, tenants will sometimes file in order to take advantage of their subsequent right to reassign the lease to a third party. This can be of concern to many commercial landlords, as they could then end up with a tenant that they did not choose. Why would a tenant want to assume a lease, and how would they go about doing so? Typically a tenant business will do so if it wants to stay on the property/in the building structure itself, especially if the lease is below-market and a third party can pay out the debtor’s estate as a lease assignee. However, in order for a tenant to do this, it must first cure any and all defaults that exist at the time of assignment (this includes both before and after filing for bankruptcy) and obtain court approval for the assignment. At this time, landlords are allowed to raise objections to the assignment (in case, for example, if the proposed assignee does not fit in the makeup of the existing tenants/structure). The tenant also first has to demonstrate that the assignment will be able to perform under the lease. Florida Attorneys Representing Landlords HD Law Partners prides itself on representing all Florida landlords in disputes, with a particular expertise in commercial and homeowners associations. With over 40 years combined experience, we can provide that guidance that you need. Contact us today to find out more. Resources: lexology.com/library/detail.aspx?g=ded39376-e2cf-46dd-a52e-fbc1e93fc817 leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0083/0083.html Tags: Florida Homeowners Association Attorney, Florida Homeowners Association Attorneys, Florida Landlord-Tenant Disputes Posted in Business Corporate, HOA/Property Management, Homeowners Association, Landlord Tenant | No Comments » Connect with us Archives May 2026 April 2026 March 2026 February 2026 January 2026 December 2025 November 2025 October 2025 September 2025 July 2025 June 2025 January 2025 January 2024 December 2023 November 2023 October 2023 September 2023 August 2023 July 2023 June 2023 May 2023 April 2023 March 2023 February 2023 January 2023 December 2022 November 2022 October 2022 September 2022 August 2022 July 2022 May 2022 April 2022 March 2022 November 2021 October 2021 September 2021 August 2021 July 2021 May 2021 April 2021 March 2021 February 2021 January 2021 December 2020 November 2020 October 2020 August 2020 July 2020 June 2020 May 2020 April 2020 March 2020 February 2020 January 2020 December 2019 November 2019 October 2019 September 2019 August 2019 July 2019 June 2019 May 2019 April 2019 March 2019 February 2019 January 2019 December 2018 November 2018 October 2018 September 2018 August 2018 July 2018 June 2018 May 2018 April 2018 March 2018 February 2018 January 2018 December 2017 November 2017 October 2017 September 2017 August 2017 July 2017 June 2017 May 2017 April 2017 March 2017 February 2017 January 2017 December 2016 November 2016 October 2016 November 13 Categories Alimony Appellate Arbitration Auto Accidents Auto Insurance Business Corporate Business Insurance Law Child Custody Child Support Criminal Law Divorce Family Law FEMA Insurance Payments Florida’s Mandatory 2‑Hour Legal Professionalism CLE: Foreclosure Defense Fort Myers Hurricane Insurance Attorney General Guardianship HD Law Partners Service HOA/Property Management Homeowners Association Homeowners Insurance Hurricane Claims Hurricane Insurance Insurance Bad Faith Insurance Claims Insurance Defense Insurance Litigation Landlord Tenant Law Enforcement Liability Loan Modifications Mold Water Damage Parental Rights Paternity Personal Injury Premises Liability Law Prenuptial Agreements Private Security Property Distribution Property Owner Law Sarasota Insurance Litigation Attorney Slip Fall Tampa Business and Corporate Attorneys tampa family attorney Tampa Insurance Attorneys Timeshare Timesharing Uncategorized HD Law Partners is proud to be your trusted full-service law firm Quick Links Property & Casualty Business & Corporate Litigation Family Law Contact Us Careers Get In Touch 2002 North Lois Avenue Suite 510 Tampa, FL 33607 813-253-5333 Contact Us