MEMORANDUM OPINION AND ORDER DENYING DEBTOR’S MOTION TO PROHIBIT EVICTION UNDER SECTION 525′s NON-DISCRIMINATION PROVISION FOR NONPAYMENT OF PREPETITION DISCHARGED RENT AND LIFTING THE STAY This Opinion addresses the important issue whether Bankruptcy Code Section 525′s antidiscrimination provision, prohibiting a governmental unit from evicting a debtor on the basis of nonpayment of prepetition discharged rent, applies to a private landlord participating in the Section 8 Housing Choice Voucher Program (the “Section 8 Program”). Bryant Avenue Associates I LP (“Landlord” or “Bryant Associates”) seeks to evict Shameka Watson (“Debtor”) from her Section 8 subsidized apartment in state court (the “State Court Eviction Proceeding”) based on her failure to pay both prepetition discharged rent and post-petition rent. If section 525 does not apply to the Landlord, section 365(d)(1) required the Debtor to cure all prepetition rent arrears in order to assume her residential lease, or the lease is “deemed rejected.” 11 U.S.C. §365(d)(1). As explained below, section 525(a) prevents a “governmental unit” from revoking or refusing to renew a lease because a debtor has not paid discharged debt. See 11 U.S.C. §525(a). The Debtor filed an order to show cause and accompanying motion to reopen her chapter 7 case and stay the State Court Eviction Proceeding because Landlord allegedly violated this Court’s discharge injunction by seeking to evict the Debtor based on prepetition discharged rent arrears.1 (“Motion,” ECF Doc. # 10.) The Debtor also argued that any further attempts by Landlord to evict her based on discharged rent would be discriminatory under section 525 of the Bankruptcy Code, which protects a debtor from discriminatory treatment by a governmental unit. At a hearing before this Court, when asked by the Court, the Landlord’s counsel would not agree to limit the State Court Eviction Proceeding to solely post-petition rent arrears. Accordingly, this Court entered an order reopening the Debtor’s chapter 7 case, imposing a stay on the State Court Eviction Proceeding, and providing that in due course the Court would issue an opinion addressing whether section 525′s non-discrimination provision applies to Bryant Associates, a private landlord participating in the Section 8 Program. This is an important issue of bankruptcy law on which there is a split in lower court decisions. For the reasons explained below, the Court concludes that section 525(a)’s nondiscrimination provision does not apply to the Landlord. Accordingly, the Debtor’s lease was terminated as a matter of law because it was “deemed rejected” due to the Debtor’s failure to timely cure the prepetition arrears. 11 U.S.C. §365(d)(1). The stay imposed by this Court on December 17, 2019 is lifted and the Landlord may proceed with the State Court Eviction Proceeding against the Debtor based on prepetition and post-petition arrears (after the stay of this Court’s decision expires, see Section IV, infra). The prepetition arrears were discharged as a personal liability of the Debtor, however, and the Landlord may not take any action now to recover the discharged debt. I. BACKGROUND A. Debtor’s Bankruptcy Proceedings On January 24, 2018, the Debtor filed a voluntary chapter 7 petition. (“Voluntary Petition,” ECF Doc. # 1.) At the time the Debtor filed her Voluntary Petition, and at all times thereafter, the Debtor rented an apartment located at 1119 Bryant Avenue, Apt. 6C, Bronx, NY 10469 (the “Property”) from Bryant Associates, owner of the Property. (Motion 4.) Bryant Associates is a private owner of residential property that entered into an agreement with the U.S. Department of Housing and Urban Development (“HUD”), allowing the Landlord to administer the Property as low-income housing in exchange for Section 8 Program subsidies. (“Landlord Opposition,” ECF Doc. # 14
1-2.) The Debtor is required to pay $1,350 per month in rent to Bryant Associates, and the balance of the rent is paid by HUD in the form of subsidies to Bryant Associates. (Id.
