Tenant Insolvency
The financial demise of a tenant is an occupational hazard for the commercial landlord. In the event of a tenant becoming insolvent, it is essential that the landlord considers its strategy and explores its available options at the earliest possible opportunity. This will include consideration of one or more of the following issues:
- Liability of a liquidator or administrator for ongoing rent;
- Recovery of rent directly from any subtenant pursuant to section 6 of the Law of Distress Amendment Act 1908;
- Utilising rent deposit monies;
- Enforcing lease obligations against original tenants and guarantors;
- Disclaimer of the lease by a liquidator and its affect on original tenants, subtenants and guarantors;
- Forfeiture of the lease including, where necessary, obtaining the permission of the court;
- Pre-pack administrations;
- Challenging a Company Voluntary Arrangement (CVA) or an Individual Voluntary Arrangement (IVA);
- Mitigating rates liability.
We regularly advise our landlord clients on the above issues with a view to achieving the optimum commercial outcome.
We also provide support to tenants and insolvency practitioners in relation to the issues arising from the tenant’s occupational property.
