oldskyblue58
CCFC Finance Director
I posted this on another thread but thought it might be useful to include separately
"interesting articles on leases while in administration
http://www.wrighthassall.co.uk/artic...dministration/
http://www.microscope.co.uk/feature/...property-lease
seems to me that a landlord can be in the hands of the administrator as long as it takes ....... (perhaps we have seen the issue of time things take and the financial cost/implications of that before?)
but certainly seems because the purpose of an administration is to save the business that the lease remains "live" unless agreed by the landlord or the court decides otherwise"
from those articles...........
- Under the Insolvency Act 1986, landlords are prevented from recovering rent arrears by forfeiture or other legal action if a company goes into administration unless either the administrator consents or the court gives permission.
- Permission for forfeiture can only be given if it will not prejudice the administration by preventing it from achieving its purpose (namely the rescue of the company or to get a better realisation for its creditors that would be achieved in a liquidation)
- Administration allows for an attempt to be made at putting the tenant company back on its feet. At commencement of administration a statutory moratorium is placed on all proceedings against the tenant company during the period of administration. Also, the landlord is prevented from exercising any right of distraint or forfeiture. This means that the landlord will be prevented from bringing any action to recover rent or the property without first obtaining the consent of the administrator or the court. The administrator cannot disclaim the lease like a liquidator; however, if the premises are surplus to the requirements of a business which is looking to continue trading, the administrator can assign the lease in the usual way.
It would seem to me from this and other articles
That unless both sides agree or the court instructs the lease is still in existence.
The lease can be assigned by the administrator but not disclaimed (ie written off)
That if still in existence a landlord has to deal through the administrator
That if still in existence a new lease can not just be put in its stead
That any party interested in leasing the premises has to deal directly with the administrator.
That a third party has no rights to use the premises in stead of the lessee unless agreed by administrator & landlord (and perhaps Court)
That a landlord cannot simply take back the lease or stop the administrator using the premises for the period of administration
That the administrator can hold the lease via the company but not use the premises, so avoiding a personal cost because of the lease moratorium in place.
Will leave you apply that little lot to what is going on and the front page headlines in the CT today
Guess it just proves how much spin is around and how the facts are hidden
"interesting articles on leases while in administration
http://www.wrighthassall.co.uk/artic...dministration/
http://www.microscope.co.uk/feature/...property-lease
seems to me that a landlord can be in the hands of the administrator as long as it takes ....... (perhaps we have seen the issue of time things take and the financial cost/implications of that before?)
but certainly seems because the purpose of an administration is to save the business that the lease remains "live" unless agreed by the landlord or the court decides otherwise"
from those articles...........
- Under the Insolvency Act 1986, landlords are prevented from recovering rent arrears by forfeiture or other legal action if a company goes into administration unless either the administrator consents or the court gives permission.
- Permission for forfeiture can only be given if it will not prejudice the administration by preventing it from achieving its purpose (namely the rescue of the company or to get a better realisation for its creditors that would be achieved in a liquidation)
- Administration allows for an attempt to be made at putting the tenant company back on its feet. At commencement of administration a statutory moratorium is placed on all proceedings against the tenant company during the period of administration. Also, the landlord is prevented from exercising any right of distraint or forfeiture. This means that the landlord will be prevented from bringing any action to recover rent or the property without first obtaining the consent of the administrator or the court. The administrator cannot disclaim the lease like a liquidator; however, if the premises are surplus to the requirements of a business which is looking to continue trading, the administrator can assign the lease in the usual way.
It would seem to me from this and other articles
That unless both sides agree or the court instructs the lease is still in existence.
The lease can be assigned by the administrator but not disclaimed (ie written off)
That if still in existence a landlord has to deal through the administrator
That if still in existence a new lease can not just be put in its stead
That any party interested in leasing the premises has to deal directly with the administrator.
That a third party has no rights to use the premises in stead of the lessee unless agreed by administrator & landlord (and perhaps Court)
That a landlord cannot simply take back the lease or stop the administrator using the premises for the period of administration
That the administrator can hold the lease via the company but not use the premises, so avoiding a personal cost because of the lease moratorium in place.
Will leave you apply that little lot to what is going on and the front page headlines in the CT today
Guess it just proves how much spin is around and how the facts are hidden
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