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Our landlord (commercial property) filed bankruptcy. Do we still pay rent to him?
Anonymous2 views3 answers
We have been told by one of the other tenants in the building that she is no longer paying rent to him. She opened a separate business savings account to use as an escrow account for these 'payments'. Is this the correct thing to do?
The question is whether there is a bankruptcy trustee who may be entitled to the rent payments. I would need to look up the bankruptcy case in order to determine who might be entitled to collect the rent.
Putting the rent payments in a so-called "escrow" account is not the same as paying rent and may not be a good solution because it could put you in default under the lease.
I would check the status of the bankruptcy case and ask the landlord what is to be done. I am not saying that the landlord has the last word on what you should do, but I would see what he says.
Lynnmarie A. JohnsonBankruptcy AttorneyFlint, MI ·
You don't have enough information for me to feel free to make that assumption. If the property is being foreclosed on, then I would immediately start putting the money in an escrow account and send a certified letter to him telling him that. Or if he is surrendering the property to the trustee or the mortgage company. You certainly do not want to be making payments to him and then find out that you should have been makng the payments to the trustee or mortgage company. You need to find out more about what kind of bankruptcy he filed and whether or not he is keeping the building. Frequently once a person files bankruptcy on a commercial building you will get a letter from the trustee or mortgage company telling you to send the payments to them. In any event, iff you decide to put the money in an escrow account, make sure that you notify him, the management company, etc by certified letter that this is what you are doing!