When a tenant files for bankruptcy protection, the landlord can
be left in a precarious position. Unlike a secured creditor,
a landlord does not have a direct claim on a tenant's
property. As such, the landlord must wait in line for the
liquidation of the tenant's assets to determine if any arrears
in rent will be paid, while expending costs to procure a new tenant
for the premises to mitigate losses on future rent. All of
this while a landlord is often making timely payments on a mortgage
and continuing to pay property operating costs.
Considering this precarious position, how can a landlord
maximize its protection from tenant bankruptcy under its
lease?
Bankruptcy and Insolvency Act
