If a company goes into liquidation, the liquidator is able to disclaim the whole of an insolvent tenant’s liability under a lease. The disclaimer ends all of the tenant’s rights, interests and liabilities, effectively meaning that the tenant can get out of the lease early. This can have a significant impact on a landlord, whose expected income from the property suddenly comes to an end.

The recent Court of Appeal decision in the Game Station case has established that administrators should pay rent on a daily basis while they are using the property. This overturns the earlier High Court decisions in the Luminar and Goldacre cases and is in keeping with the recent trend of flexibility and fairness in insolvency situations.

Leasehold property in an administration

For landlords of commercial premises, one of their main concerns is making sure that the tenant pays all sums due under the lease. Unfortunately this doesn’t always happen so what are the options for recovering unpaid rent? This note summarises the different methods of enforcing payment of rent and looks at the advantages and disadvantages of each.

Considerations before you take action

Before commencing any enforcement action to recover rent arrears you should think about the following points:

If a company goes into liquidation, the liquidator is able to disclaim the whole of an insolvent tenant’s liability under a lease. The disclaimer ends all of the tenant’s rights, interests and liabilities, effectively meaning that the tenant can get out of the lease early. This can have a significant impact on a landlord, whose expected income from the property suddenly comes to an end.