Insolvency Property Issues

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The difference between Landlord and Tenants

We understand that insolvency can be a difficult time, which is why we provide specialist legal advice for both Landlord and Tenants. We can assist you with overcoming any potential legal barriers in swift and timely manner.

Insolvency Issues for Landlords

During the economic downturn, a tenant entering into an insolvency process was a big issue for landlords. Often landlords were owed huge amounts of rent but were restricted from taking any steps against the tenant due to the statutory moratorium put in place when a tenant entered administration or liquidation.
The key issue for landlords when a tenant is insolvent or on the verge of insolvency is to ensure that rent arrears are paid and future rent payments secured. Unless landlords have protection in place such as a rent deposit deed or a personal guarantee, it can be difficult for landlords to protect their position. Balanced with this, landlords need to take into account commercial considerations in the long term as pushing hard for rent in the short term could result in the premises becoming empty and empty rates liabilities arising.

Insolvency Issues for Tenants

There can also be numerous issues for tenants when their landlord enters into an insolvency process. These include:
• Rent payments;
• Rent deposits;
• Landlord’s failure to comply with lease covenants;
• Dealing with lease renewals and rent reviews;
• Disclaimer of landlord’s interest in the property; and
• Forfeiture.

Mortgage Disputes

A mortgage is the transfer of ownership of an asset by way of security for particular, on the condition that it will be re-transferred on the discharge of the secured obligations.

There are various methods of enforcement available to a mortgagee where a mortgagor does not satisfy its obligations under the mortgage.

A mortgagee should take legal advice before enforcing a mortgage. Similarly, if faced with enforcement action, a mortgagor should seek independent advice. This is a complex area of law and we would strongly suggest that you should seek legal advice from the outset from a property litigation solicitor.

Our Approach & Our Experience

Myerson recently acted for a landlord in connection with the forfeiture of a lease for non-payment of rent and breach of the alienation provisions relating to a Pub and with a property value in excess of £2m.

Price Waterhouse Coopers LLP were appointed as administrators of the tenant and they made an application to our client for consent to assign the lease to a third party.

We were instructed to forfeit the lease for various breaches so that our client could grant a new lease to a more suitable tenant. The landlord required either the consent of the administrators or the permission of the Court. The administrators did not consent but permission was granted by the Court and our client’s costs were paid in full.

Our expert property litigation solicitors have experience in advising on all property aspects that arise from a landlord or tenant becoming insolvent.

Our Promise & Core Values