Landlords typically have a number of obligations to fulfil, such as maintaining, repairing and providing insurance for the property the tenants inhabit. If the landlord is a company at risk of insolvency, however, or an individual nearing bankruptcy, then it is not safe for leaseholders to assume that these obligations will be met or that the freehold interest will necessarily pass to them. Leaseholders need to be aware of what they must do in such a situation in order to acquire the freehold interest from the landlord.

A trustee in bankruptcy lost all rights to the proceeds of sale of a freehold property after he disclaimed title to it

Background

Mr Sleight was the trustee in bankruptcy of an insolvent estate. The deceased’s assets included several freehold properties that were charged to banks where the value of the property was less than the amounts due under the charges. Given the negative equity, the trustee in bankruptcy disclaimed title to these properties as they constituted “onerous property”.