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ARTICLE · 02 JUNE 2020

Will longer landlord lockouts become the new norm?

Holding Redlich
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In recent decisions, the Court allowed administrators to continue to occupy leased premises rent-free for an extra month.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Kim MacKay
Kim MacKay
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In two recent decisions, the Federal Court has allowed administrators to continue to occupy leased premises rent-free for an extra month. Should landlords be worried that this trend will continue? Whilst the decisions were undoubtedly made in the extraordinary circumstances of COVID-19, it is not difficult to see a precedent being established with similar orders being made more frequently in the future.

The usual deal: Five free days

Under the usual statutory timeframes, an administrator appointed to a company has five business days to decide whether to continue to occupy leased premises1. After these five business days, the administrator becomes personally liable for rent and outgoings. To avoid personal liability, the administrator can issue a notice to the landlord within the first five business days of the administration and inform it that it no longer proposes to exercise rights in relation to the property. This notice does not automatically terminate the

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