Rent during an administration?

August 26, 2010

In the recent case of Goldacre (Offices) Limited v Nortel Networks Limited (In Administration), the High Court clarified the position with regard to the payment of rent by a tenant company in administration.

The Court held that so long as the administrators were keeping possession of or using part of the premises for the purposes of the administration, the administrator must pay the full rent as it falls due as an expense of the administration.

Before this decision, the approach in practice was to treat each case for payment of rent on its own merits and to balance the interests of the landlord against the interests of creditors of the tenant company. Now administrators must assume that if they use the premises, the rent must rank as an expense of the administration.

The downside for landlords, is if the administrator cannot fund the payment of rent, he may vacate thus leaving the landlord with no rental income and a vacant property.


Related pages:

Real Estate more

icons Addthis Print Contact Register

Contact

tel: +44 (0) 20 7628 2000
10 Finsbury Square, London, EC2A 1AF
View map


For more information

 image

Elizabeth Ruff
Partner
Direct dial: +44 (0)20 7614 2514
eruff@foxwilliams.com

Accreditations

  • Top Ranked Chambers UK 2014 - Leading Firm
  • Ranked in Chambers Europe 2013 - Leading Individual
  • Ranked in Chambers Global 2014 - Leading Firm
  • Legal 500 - Leading Firm
  • The Lawyer UK 200 - Listed Firm
  • The Law Society Excellence Awards 2012 - Shortlisted
  • Investors in People - Bronze