[NYtenants-online] And in Washington, they're also going after tenants.

[Tenant]

NYtenants Online/TenantNet                                4/16/02
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IN THIS ISSUE ...

1. Tenants in Bankruptcy could face eviction

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LANDLORD TENANT PROVISIONS IN THE BANKRUPTCY BILL (H.R.333)

INTRODUCTION

The bankruptcy bill sought by the credit card industry is currently in 
conference committee, of which New York Senator Chuck Schumer is a member. 
Both the House and Senate bills include anti-tenant provisions promoted by 
the Landlord Lobby that would weaken or eliminate the automatic stay that 
protects tenants from eviction temporarily after they file a bankruptcy 
case. However, the Senate bill was made somewhat more moderate by Sen. 
Feingold's amendment (see below).

Senator Schumer should be urged to support tenants rights, as protected by 
the Senate bill, and not agree to the House bill or landlord proposals now 
being made that are almost as bad as the House bill.

CURRENT LAW

The automatic stay serves two basic purposes in bankruptcy. It permits the 
orderly liquidation or reorganization of the debtor's assets under the 
overall supervision of the bankruptcy court, and it gives the debtor a 
short breathing spell to get her affairs in order to go forward with her 
life. Since the Bankruptcy Code was enacted, the automatic stay that 
becomes effective upon the filing of a bankruptcy petition has always 
prohibited a landlord from evicting a tenant unless the landlord obtains 
bankruptcy court permission ("relief from the stay"). In chapter 13, a 
tenant has a right to assume a lease and to cure a default. In chapter 7, 
the short "breathing spell" in many cases allows a chapter 7 debtor, 
relieved of other debts, to use this brief period to catch up on rent and 
avoid eviction. The right to avoid eviction is obviously of great 
importance to tenants who would suffer the hardships of moving, possibly 
becoming homeless, and having to find new housing, and it is of even 
greater importance to tenants in public housing, rent controlled or 
rent-stabilized apartments, who would lose valuable property rights. An 
eviction would normally doom any hope of the tenant completing a chapter 13 
repayment plan or getting much benefit from the fresh start bankruptcy is 
intended to provide.

The automatic stay is virtually universal. There is short list of very 
limited exceptions for critical societal needs, such as criminal 
proceedings, child support collection, and environmental regulation.

THE HOUSE BILL

The basic problem with the House bill is that it elevates all landlords to 
the privileged position reserved for these most important societal needs, 
at the cost of disrupting the debtor family's life and fresh start, and 
removes the bankruptcy court oversight that exists for all other aspects of 
a family's financial affairs.  The bill as currently written, or with the 
minor modifications proposed by the landlord lobby in conference, will 
cause the eviction of thousands of single mothers, domestic violence 
victims and others who could catch up on their rent after bankruptcy.

The House bill would allow all evictions based on expired leases and on 
terminated leases to go forward. Together, that basically means all 
evictions. The rumored "compromise" provisions proposed by the landlords 
would cut back on this blank check only slightly. Either version of the 
landlords' proposal would cause families to lose their right to stay in 
public housing or rent controlled units, which is often the most precious 
asset they have.

THE SENATE BILL (FEINGOLD AMENDMENT)

The Feingold amendment, which passed the Senate with Senator Schumer's 
support and is in the Senate bill, is a fair and practical solution that 
gives the landlords most of what they want, and in fact gives them more 
than any other entities except for those furthering the most vital societal 
functions like criminal prosecutions and child support. Landlords will be 
able to collect rent after bankruptcy, so they are no worse off than if 
they evicted the debtor and got a new tenant. If the rent is not paid, they 
can quickly go ahead and evict after an expedited procedure of filing a 
simple form that will not require an attorney or a court hearing. In 
addition, Senator Feingold was forced to agree to an exception that would 
give landlords the right to evict even a tenant who was paying rent after 
bankruptcy if the landlord certifies that the tenant has a month to month 
tenancy that is not protected by a rent control law. The Senate bill (like 
the House bill) also allows for immediate eviction if the tenant has filed 
prior bankruptcy cases and failed to pay rent after filing them or if the 
landlord certifies that the tenant has endangered property or allowed 
illegal drug use on the property.

Even with the Feingold amendment, the Senate version is pretty bad, as is 
the rest of the bill. The provision has a pretty long history, since this 
is the third time around for the bankruptcy bill. The landlord tenant 
provision started with Sen. Sessions and is being pushed by the 
Multihousing Council and other landlord groups. Feingold has been tenants' 
main champion. There was a vote on the amendment on the floor in the last 
Congress and in Senate Judiciary this Congress, with some debate each time. 
Biden is another key vote we are nervous about. Some of the impetus for 
these provisions came from California landlords. It's possible that NY 
landlords were brought in more recently in the attempt to get to Senator 
Schumer. But some wonder if it's not worth it for the Senators to hold out 
for the landlords as the whole effort is being pushed by the banks for the 
massive credit card debt across the country. If the tenant provisions 
become an obstacle for the bills's passage, it's possible that the credit 
card companies might put pressure on their buddies to jettison the landlords.

There has been almost no press about the tenant provision of the bill -- 
most of the coverage has to do with the credit card provisions. It is very 
important in some parts of the country, especially where there is rent 
control, and to public housing tenants.

Key people are the Senate Democrats on the Conference committee. The 
shakiest are Joseph Biden (Deleware) and Herb Kohl (Wisconsin). Others 
besides Chuck Schumer are Patrick Leahy (Vermont, and as Chair he is very 
important), Russell Feingold (Wisconsin), Richard Durbin (Illinois), Edward 
Kennedy (Mass.). The biggest fear is that Joe Biden will go along with the 
Republicans on this issue and others to get the bill for Delaware credit 
card companies.

Negotiations are going on this week about the landlord tenant provision. 
Sen. Feingold is trying to build in some protections for rent control 
tenants and is being attacked by Sen. Orin Hatch's (Utah) staff who say 
rent control tenants don't need protection.

For additional information, see: 
http://www.cuna.org/data/membercu/gov_affairs/leg_affairs/public/bankruptcy_2001.html 


Now is the time for Senator Schumer to get involved. In particular, he 
needs to keep Sen. Biden from abandoning tenants' rights.

CONTACT INFO FOR SENATOR CHUCK SCHUMER

Washington, DC
313 Hart Senate Building
Washington, DC 20510
Phone: 202-224-6542
Fax: 202-228-3027
TDD: 202-224-0420

New York City
757 Third Avenue
Suite 17-02
New York, NY 10017
Phone: 212-486-4430
Fax: 212-486-7693
TDD: 212-486-7661

Email (webform): http://schumer.senate.gov/webform.html
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