REALTOR® Magazine-Daily News-NAR Applauds RE Provisions in Bankruptcy Reform Bill

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Daily Real Estate News | March 11, 2005 | NAR Applauds RE Provisions in Bankruptcy Reform Bill The NATIONAL ASSOCIATION OF REALTORS® commended the U.S. Senate for passing four real estate provisions as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (S. 256) on Thursday night. The bankruptcy reform bill now moves to the U.S. House of Representatives. The legislation contains four NAR-supported provisions that will better position real estate assets when tenants or owners file for bankruptcy. First, it repeals the arbitrary $4 million debt cap on single asset real estate bankruptcies and makes all properties subject to an automatic stay from creditors for 90 days, with extensions for cause. Current bankruptcy law grants properties valued at less than $4 million an automatic 90-day stay from creditors while properties valued at more than $4 million can have their stays extended for more than six months. Second, the bill closes the loophole that allows residential tenants to avoid or delay eviction by declaring bankruptcy. This provision maintains the protections currently enjoyed by tenants under state landlord-tenant laws. Third, the bankruptcy reform bill makes homeowner or condo association fees and assessments non-dischargeable debts. Finally, the bill protects shopping center owners by giving tenants who declare bankruptcy 120 days to assume or reject a lease. This is double the initial time permitted under current law, which gives tenants who declare bankruptcy 60 days to assume or reject a lease. However, courts have routinely extended this time for many months or even years. “REALTORS® believe the real estate provisions of the bankruptcy reform bill will help curtail the misuse of our bankruptcy code," says NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City. "We look forward to working with Congress and the administration to enact this important legislation this year.” —NAR