Legal Question in Landlord & Tenant Law in California

I am a new landlord and about to rent out my house at $3200 a month. A family want to rent my house on September and submitted his application today. I ran his credit report and found out he just filed a Chapter 7 bankrupcy last month.

What is my risk if I rent the house to him ? If he does not pay his rent, how long will it take legally to let him move out ? Does he get any bankrupcy protection in any way that will affect his payment to my rent ? He intend to pay me cash monthly.

Asked on 7/26/11, 1:06 am

1 Answer from Attorneys

Mark Saltzman, MBA, JD Law Offices of Mark E. Saltzman

Obligations incurred by a Chapter 7 debtor, after the date of his filing the bankruptcy, are not dischargeable in the pending bankruptcy proceeding. So, if the debtor signs a lease with you, now, the bankruptcy should not affect the debtor's responsibility to you. Here are a few considerations, though, in answer to your other questions:

1. If the tenant does not pay rent, you can begin the eviction process by serving the appropriate notice and going to court. Usually, when a tenant does not pay rent, the landlord serves a 3-day notice to pay or quit. After the 3 days, if the rent has not been paid, the landlord begins an action for unlawful detainer. That process takes about three to eight weeks, depending on several factors.

2. It is curious that the prospective tenant wants to pay you in cash. If the prospective tenant can afford $3200 per month for rent and he or she honestly disclosed his or her assets and income in the bankruptcy proceeding, it is unlikely that the prospective tenant would be eligible for a Chapter 7 proceeding. Accordingly, it is reasonable to suspect that the tenant is using undisclosed assets and/or income to pay you. If so, the prospective tenant is asking for trouble in the bankruptcy, and you would be dealing with a less-than-honest person.

I will not make any conclusions about the prospective tenant's honesty, but you know that he is trying to get out of debts, already, and he is paying you in cash. I'm not sure that I would want to get into a $38,400 per year relationship with such a person, under the circumstances.

If you want to check out the person's finances, you can go to the bankruptcy court and look at his financial data. It's available on public computers, at the courthouses.

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Answered on 7/26/11, 12:34 pm

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