BANKRUPTCY REFORM, MANDATORY ACCESS, TAX LEGISLATION

Members of the NAA/NMHC Apartment Industry Mobilization Service (AIMS) wrote more than 400 letters to U.S. Senators in April. As loyal readers of this column know, the National Apartment Association/National Multi Housing Council has been lobbying for changes in the current U.S. Bankruptcy Code to prevent abuse by residents who file for bankruptcy for the sole purpose of delaying eviction and living in apartments rent-free.

Both the Senate and the House have introduced legislation addressing this abuse (Section 409 of S. 1301/Section 163 of H.R. 3150). Section 163 of H.R. 3150 is a narrower provision of the two and would exempt terminated leases from the U.S. Bankruptcy Code automatic stay provision, which residents have used to prevent rental property owners from carrying out evictions and recovering their properties. When a lease has been terminated, however, is dependent upon state law. In some states, a lease is terminated when a property owner files for eviction, but in other states a lease isnot terminated until a resident is physically removed from an apartment. Section 409 of S. 1301 would exempt leases from the automatic stay at any time during the commencement or continuation of an eviction.