Page Three

     It was not until the year 2000, when the U.S. Supreme Court upheld this law in Lee v. Baca, that the Sheriff's offices routinely began doing lockouts if the tenant's petition was filed post-judgment. the court reasoned that once a judgment has been granted for possession of the leased property, the tenant has lost the leasehold interest as an asset, and the lease could no longer be construed as part of the bankruptcy estate. The result is that if a judgment for possession has been rendered, the eviction should continue notwithstanding the tenant's bankruptcy filing.

     In the 2001 Congressional Session, legislation was introduced to prevent a bankruptcy filing from stopping an eviction if the tenant's lease had expired or was otherwise forfeited. The favorable language is found in the House version of Section 311 of the Bankruptcy Reform Act of 2001. If this provision becomes part of the Act, the number of frivolous bankruptcy actions will dramatically decrease.

     With knowledge of bankruptcy procedure, and by acting in a timely fashion, and hopefully, with a little help from Congress, you can minimize your losses when your tenant files for bankruptcy.

     Ted Kimball and Patricia Tirey are partners of Kimball, Tirey & St. John. The law firm specializes in landlord/tenant, collections and business and real estate, with offices throughout California. If you have any questions regarding the contents of the article, please call 1-900-338-6039.

     The above discussion is general in nature and should not be construed as individualized legal advice Readers are cautioned to seek individualized legal assistance based on a detailed analysis of their particularly facts and circumstances.

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