There are many "legal obstacles" a landlord must cross before legally
regaining possession of the premises. The time it takes to regain possession
depends on a number of factors.
One "legal obstacle" arises when a tenant files a bankruptcy petition
to delay the inevitable eviction. A recent California appellate case addressing
this issue is Lee vs. Block. In Lee,
a residential tenant failed to respond to the landlord's unlawful detainer
complaint and the landlord obtained a default judgment and a writ of possession.
Before the sheriff executed the writ, the tenant filed a petition in bankruptcy.
The question in the case was whether the landlord was required to apply
to the bankruptcy court for relief from the automatic stay per 11 U.S.C.
section 362 (a) or whether the pre-bankruptcy judgment has extinguished
whatever legal or equitable interest the debtor might have had in the real
property- in which event the landlord is not required to seek relief from
the bankruptcy court and is, instead, entitled to demand that the sheriff
execute the writ of possession forthwith.
The California Court of Appeal in Lee
vs. Block held that the unlawful detainer judgment extinguished
the residential tenant's interest in the property and that a post-judgment
bankruptcy filing does not affect the landlord's right to regain possession
of his property-because it is not, at that point, property of the estate.
What is significant, is the issue of timing. Had the tenant filed for
bankruptcy protection at any time prior to the entry of a default judgment,
the landlord would have been required to obtain relief from the automatic
stay before the bankruptcy court-a process which would increase the landlord's
legal expenses and buy the tenant more time to delay the eviction.
Part of the court's rationale concerned the practical consequences of
a contrary holding which would have had the effect of increasing the cost
of doing business-adversely effecting both landlords and tenants. The court
stated that a contrary result "is that the cost of doing business as a
residential landlord rises with the additional expense of hiring lawyers
not only to pursue an eviction in the state court, but also to obtain relief
from the stay in bankruptcy court. These added costs necessarily increase
the rent that must be paid by low-income tenants. The ever increasing rents
for low-income housing, of course, only makes it harder for tenants to
pay their rent and therefore leads to more abusive bankruptcy filings.
Thus, this vicious cycle repeats and repeats."
Lee vs. Block gives
clear direction to county sheriffs and their attorneys who may be reluctant
to process writs of possession of real property when a tenant has filed
Lee vs. Block is a state
case and, therefore, the sheriff or other levying officer is required to
follow the case and execute the writ of possession. We have not seen any
cases where the bankruptcy court has interpreted either California statute
or theLee case.
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