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