Search Site
Menu
Landlords Beware of the Tenant Bankruptcy Scare

Hindsight is 20/20, at least that is what one Landlord might say after fighting for multiple months to regain possession of his property from a non-paying Tenant.  In this case, the Tenant strategically filed a bankruptcy action the day before the Landlord was set to regain possession of his property.  The result –possibly having to wait six months to just get possession of his house from the Tenant during the pendency of the bankruptcy action.  This Landlord was dealing with a serial bankruptcy filer, someone who knows how to use the system to their personal advantage.  Once a bankruptcy action is filed, an automatic stay goes into effect which essentially stops (“stays”) all pending actions, including eviction actions to regain possession of your property.  If a non-paying Tenant files bankruptcy while living in your home, they will be able to continue living there (making no rent payments) until the bankruptcy case is resolved.  Below are 3 ways a Landlord can protect themselves from the Tenant bankruptcy scare in the future:

(1)  Creditworthiness and financial stability are crucial aspects for a Landlord to consider when evaluating a potential Tenant.  Ask yourself: Can this Tenant afford these monthly rental payments based on their past financial history? There should be no hesitation here.  Making this determination early on will save you a lot of time, money and the value of your property in the future.

(2)  Actually conduct comprehensive background searches.  A one-page credit inquiry or even worse, a Tenant’s “word” on their financial soundness, will simply not suffice when you are considering to put your property in a stranger’s hands.  Also, conduct a search on any person that is going to be residing at the property for more than 2 weeks.  This is an important procedure that must be done prior to Tenants/occupants residing at your property.

(3)  Lastly, consider having an attorney review or draft your Residential Lease Agreement to assist in protecting your interests before permitting a Tenant to move-in.  Trust me, hiring an attorney to do an initial review on your lease in the early stage is far more cost-effective than having to retain after the Tenant stops paying rent, or even worse, files bankruptcy.

So, how does this story end? With a lot of lessons learned and with our firm’s assistance, a new, suitable Tenant to lease the Landlord’s property.

Kyla Wilder

Phone Number: 281-367-1222

Fax Number: 281-210-1361

[email protected]

Leave a Reply

Your email address will not be published. Required fields are marked *

Contact a Dedicated Texas Business Lawyer To Schedule a Consultation
Call 281-367-1222 or contact us online to schedule a meeting.

Strong In Action

  • Spring 2019

    The Strong Firm represents borrower in $42.3 million HUD construction loan for multifamily real estate development in Walton County, Florida.

    Read More
  • Spring 2019

    The Strong Firm acts as legal counsel for borrower in $32.1 million HUD construction loan for multifamily real estate development in Conroe, Texas.

    Read More
  • Spring 2019

    The Strong Firm aids borrower in $31.7 million HUD construction loan for multifamily real estate development in Nueces County, Texas.

    Read More
  • Spring 2019

    The Strong Firm represents borrower in the refinancing of a $3.57 million commercial mortgage-backed security for a commercial office facility in Montgomery County, Texas.

    Read More
  1. 1
  2. 2
  3. 3
  4. 4
  5. 5
  • Peer Rated 2019 Award

Recent Blog Posts

2019 Legislative Update – Texas POA Laws

In odd numbered years, Texas property owners associations (POAs) must consider any new laws affecting POAs that became effective following the Texas legislative session earlier that year. For 2019, a few such laws recently went into effect specific to residential POAs (but excluding condominium associations). HOUSE BILL 234 – Protection of
Read More
2019 Legislative Update – Texas POA Laws

Wrapping Up a Decade: Meaningful New Year’s Resolutions

As 2019 comes to a close, it’s a good opportunity to reflect on what we’ve accomplished and make resolutions for what we hope to do in 2020. I have never been a fan of New Year’s resolutions as they often seem like short-term, immeasurable goals. Things like “I am going
Read More
Wrapping Up a Decade: Meaningful New Year’s Resolutions

Not Worth the Paper It’s Written On

We have all heard the saying that something is “not worth the paper it is written on.”  This is usually said about a contract that is unenforceable or even if enforceable, it may have no value because the party has no ability to pay or perform under the contract.  Many
Read More
Not Worth the Paper It’s Written On

“So…What Happens to My Bitcoin When I Die?” Modern Estate Planning for Digital Assets and Cryptocurrencies

Millennials have complicated everything. Socializing in person wasn’t enough, so they created Facebook. Dollars weren’t enough, so they created Bitcoin. Every new app, technology or cryptocurrency brings with it more uncertainty legal uncertainty around these digital assets. Are they currency? Are they property? Can they be gifted? Can they be
Read More
“So…What Happens to My Bitcoin When I Die?” Modern Estate Planning for Digital Assets and Cryptocurrencies
  • Video Vault


    Watch videos done by our legal team to gain a better understanding of your legal needs. Our lawyers give video insight into areas such as Real Estate, Business Law, Mergers & Acquisitions and much more.

Pay Retainer Online

Use our easy-to-use and secure online payment feature.
We accept all major credit cards.

Pay Your Retainer

Contact us

Quick Contact Form