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My landlord owns and maintains the property I'm leasing though an LLC. The lease documents are between myself and the LLC.

I was recently sent a letter that says that my landlord's LLC is filing for bankruptcy. He mentioned that future rent checks should be made out in his name rather than to the LLC like it was previously.

Does this mean he is breaching the lease agreement? Would I be within my rights to break the agreement because of this?

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    I wouldn't change how rent is paid unless you hear it from the property owner (the LLC). The Landlord's say-so is not good enough if he personally isn't either the owner or listed on the lease. – Ben Voigt Apr 10 '18 at 4:00
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    I'd investigate if you paid any deposits to the LLC, and what are the consequences if the LLC goes bankrupt. – gnasher729 Apr 10 '18 at 6:45
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    @BenVoigt if the landlord is a member, manager, or agent of the LLC, which I suppose he probably is, how would Cheesus Crust be expected to understand that an instruction from the landlord is not coming "from the property owner (the LLC)"? – phoog Apr 10 '18 at 18:31
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    @phoog: It still has to be issued formally in his capacity as officer of the LLC, and with bankruptcy proceedings ongoing, it may be that the LLC's officers no longer have the authority to issue such instructions and must get approval from the court / bankruptcy trustee. So no, instructions personally from the landlord are not to be understood as coming from the property owner. – Ben Voigt Apr 10 '18 at 19:17
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    Upon the filing of the bankruptcy, the LLC no longer owns any of its property (unless it is a U.S. Chapter 11), it is instead the property of a bankruptcy estate. In this case, the landlord is probably committing a crime and should probably be reported to bankruptcy officials or the police. – ohwilleke Apr 11 '18 at 5:39
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Your lease is with the LLC in bankruptcy - you should not be paying rent to anyone else. Unless and until the lease is transferred to someone else (in accordance with the terms of the lease or with your agreement) it will remain with the LLC. Contact the bankruptcy trustee to see how they intend to proceed.

Providing the LLC keeps fulfilling its obligations under the lease there is no breach.

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    I'll look into this, although, considering the landlord himself told me to start writing checks in his name rather than the LLC shows me he may be trying to hide money. – Cheesus Crust Apr 10 '18 at 14:14
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    @CheesusCrust It appears that this is little more than blatant theft from the bankruptcy estate. I have a case where the manager of an LLC landlord who is a disbarred lawyer is trying to do something similar. – ohwilleke Apr 11 '18 at 5:35
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The LLC is your landlord.

The person who owns the LLC may be doing any number of things, some of which have dubious legality.

However, none of them are related to your lease agreement, which is with an LLC, which is now under the management of an official assignee. Until such time as the actual landlord, the LLC under control of the official assignee, communicates a change in payment directions, you should continue to act as you have been, because the agreement is entirely unchanged and unaffected.

If the property is transferred as part of settling the debts, your lease remains intact. You simply have a new landlord with the exact same rights and responsibilities as before.

  • As someone that is trying to break free of this lease (To avoid issues with the shady business of the Landlord), would it be possible? – Cheesus Crust Apr 10 '18 at 18:30
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    Presumably, the person identified by Cheesus Crust as the landlord has been the LLC's agent in all matters related to the property (for example, signing the lease). How then is Cheesus Crust to understand that the instruction from that person to change the payee of his rent checks isn't being communicated to him by "the actual landlord, the LLC"? – phoog Apr 10 '18 at 18:34
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    If it is going under, it will have an official assignee, whose authority is now needed. If they don't have an authorisation from the assignee, they don't have agency. Since the issue is the original owner's management, the assignee is almost guaranteed not to involve them in acting on both sides of the bankruptcy (as the owner of the bankrupt company and as the agent of the assignee managing that bankruptcy). @phoog – Nij Apr 10 '18 at 19:05
  • See edits. Your lease continues through transfer (sale or otherwise) of the property. The new owner becomes your new landlord, under the exact same lease. – Nij Apr 10 '18 at 19:11
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    Your deposit should be perfectly safe - if your jurisdiction mandates placing it with a trusted third party such as an independent bond-holding agency. Otherwise, you may have the right to reclaim the bond from the landlord at the time of termination, regardless of who it is. A contract lawyer who is especially familiar with tenancy law would be necessary to work out whether that's going to be a successful argument, though. – Nij Apr 10 '18 at 19:35

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