Short answer: bankruptcy of a Russian individual entrepreneur does not automatically terminate a commercial lease. The contract terms, date of each debt, actual use of the premises, and the decision whether business activity should continue must be reviewed. New rent may continue to accrue until the premises are properly returned.
Practical priority: decide quickly whether the premises are needed to complete operations and preserve assets. If not, terminate the contract correctly, remove property, and record the return in a handover act.
What happens after the bankruptcy case begins
| Situation | Risk | Action |
|---|---|---|
| Debt arose before the bankruptcy filing was accepted | The landlord submits the claim in the case according to its legal nature and the procedural stage | Reconcile periods, rent, penalties, and primary records |
| The premises remain in use after commencement | New amounts may qualify as current payments rather than ordinary registry debt | Coordinate continued use with the financial manager and control payment |
| The contract ended but the premises were not returned | Charges may continue during delay | Transfer keys, sign a return act, and record condition and date |
| Equipment remains inside | Ownership and retention disputes may arise | Prepare invoices, lease or leasing contracts, and an inventory |
| There is a security payment or advance | Set-off or refund depends on the contract and accrued obligations | Distinguish security from prepaid rent |
Bankruptcy is not automatic termination
The lease remains effective until it ends under law or its terms. The landlord may use contractual termination rights or seek early termination, including for repeated non-payment. Article 619 of the Civil Code requires a written warning and a reasonable opportunity to perform before a judicial termination claim.
The tenant should not assume that stopping business ends the lease. The term, unilateral termination clause, notice period, and any termination fee must be checked.
Pre-case debt and current rent
The date on which each obligation arose is central. Arrears for pre-case periods and rent for actual use after commencement may follow different payment regimes. Current payments under Article 5 of Bankruptcy Law No. 127-FZ should not be merged with registry debt.
A single balance statement is not enough. Prepare a monthly schedule separating base rent, utilities, operating charges, penalties, security, and the date of each accrual.
How to return the premises
- Send notice by the method required in the contract and preserve delivery evidence.
- Inventory property belonging to the tenant and third parties; remove documents and personal-data media.
- Record the condition, meter readings, and complete set of keys with photos and video.
- Prepare a bilateral handover act with the exact date. If the landlord refuses, create unilateral evidence and formally offer the keys.
- Obtain a final statement and identify disputed items in writing.
Article 622 of the Civil Code requires the tenant to return the property. Ceasing operations or payments alone is not a substitute for documented return.
Security payment, advance, and set-off
Under Article 381.1 of the Civil Code, a security payment may be applied when the event specified in the contract occurs. If the secured obligation ends and no application event exists, the amount is refundable unless the parties agreed otherwise.
An advance has a different function: it pays for a future rental period. Before set-off, identify the legal nature of the amount, contract terms, and timing of mutual claims. Calling every deposit “the last month” does not replace the contractual analysis.
Equipment and improvements
Separable improvements normally belong to the tenant unless the lease says otherwise. Non-separable improvements made with landlord consent may be reimbursable after termination, but the contract can alter that rule. Improvements made without consent are normally not reimbursed.
Cash registers, furniture, medical or production equipment should be listed with the owner identified. Property owned by the landlord, a leasing company, or another third party is not the debtor’s asset, but ownership must be proved.
If the business continues
Continued rent is sensible only where there is a clear source for current payments and an economic reason. The financial manager will need the lease, revenue forecast, staff and equipment data, and termination risks. New liabilities should not accumulate without a realistic payment plan.
Frequently asked questions
May the landlord immediately change the locks?
Access restrictions depend on the contract, notices, possession, and the property inside. In a dispute, record the facts promptly and send a written demand for access to records and assets.
Will rental arrears be discharged?
Not every part of the balance has the same treatment. Pre-case claims and current charges differ, and discharge also depends on the procedure’s outcome and the debtor’s conduct.
Can the tenant remove improvements and equipment?
Equipment and separable improvements may be removed where ownership is documented and the contract permits it. Non-separable improvements are not physically removed; possible reimbursement depends on Article 623 and the lease.
Official sources
- Bankruptcy Law No. 127-FZ, Article 5;
- Civil Code, Article 619;
- Civil Code, Article 622;
- Civil Code, Article 623;
- Civil Code, Article 381.1.
Related: individual entrepreneur bankruptcy, current payments, and equipment in leased premises.
Need to stop rental debt from growing? The lease, accrual periods, return procedure, equipment, and security payment can be reviewed before filing or closing the premises.
This material is general information. The contract terms and stage of the case may change the required steps.
Ending Sole-Trader Status Does Not Close the Lease or Debt Overnight
Quick check
Stop silent occupation
Give notice through the agreed channel and offer handover.
Return access with evidence
Keys alone may not prove that the premises were vacated.
Classify every asset
Stock, leased goods, finance leases and customer property need different records.
Ongoing Rent Can Reduce the Bankruptcy Estate
Rent for post-petition periods is generally assessed as a current claim where the premises remain available. An unnecessary site should not continue without a reasoned decision. Yet termination must still follow the agreement and Civil Code: bankruptcy itself does not replace notice, return and calculation.