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Insolvency

In difficult financial times, tenant insolvency and how it impacts on landlords’ remedies is often an important issue. Unfortunately, this area of law can be confusing.

It is helpful from a landlord’s point of view if a potential insolvency situation is spotted early on for a number of reasons, including the fact that early action may avoid the effect of a moratorium on action and/or minimise any void period whilst the property is empty without income. Spotting problems at an early stage can enable a landlord to avoid waiving the right to forfeit if this route for termination is going to be a practical solution that the landlord might want to pursue. (See here for information on Termination of Tenancies.)

However, it is often overlooked that there are certain steps that a landlord can take even in an insolvency situation to get the rent and other liabilities paid. Our guidance provides an overview of the various different types of insolvency arrangement and how they affect a landlord’s remedies for tenant default, as well as an explanation of what happens to a lease when a tenant company is dissolved. (For a reminder of the various arrears remedies available to landlords, go to Arrears Recovery.)

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