A commercial eviction is treated very similarly to a residential eviction, with an important exception that your attorney must consider. In particular, a landlord may be able to continue with a commercial eviction depending on the current status of your tenancy. Bankruptcy can stop a residential eviction, as explained in my blog entitled, “Can Bankruptcy Stop an Eviction?” But can it stop an eviction involving a commercial property? The answer will depend on what has transpired prior to the date your case is filed.
Residential and commercial evictions are treated differently under San Diego bankruptcy law. In a residential eviction proceeding, a Chapter 13 case filed prior to the entry of a judgment in the eviction action can stop the eviction. But if the eviction proceeding has already resulted in a judgment for possession in favor of the landlord, then neither a Chapter 7 nor a Chapter 13 filing will not the eviction process, unless you file a special certification and immediately deposit one month’s rent with the court and also become current within 30 days.
In the context of a commercial eviction, a bankruptcy filing will not stop the commercial eviction process if the lease has been terminated under California law prior to the date that your case is filed with the court. Under California law, a lease can be terminated in various ways, including by the service of a 3-day Notice, assuming that the 3-day notice is properly done and notice is given to the appropriate parties.
The reason that commercial evictions cannot be stopped once the lease is terminated is that Federal law does not allow a Chapter 7 or Chapter 13 trustee to assume a commercial lease that has already been terminated. If the commercial lease has been terminated, then the lease cannot be assumed and hence a Chapter 7 or 13 filing is of no effect. An exception may exist if the commercial lease gives the tenant additional rights and does not allow for termination via the 3-day notice procedure. An experienced attorney can help you decide if a bankruptcy could possibly stop your commercial eviction.