Game Changer: Rent As An Administration Expense

The Court of Appeal has now ruled that administrators are bound to pay rent as an expense of the administration for the whole period that they are causing the company to use the property, regardless of when the rent fell due under the lease.

Introduction

For quite some time landlords have been in an impossible position when their tenants have gone into administration. This is because the effect of recent case law has made it common for companies to enter into administration the day after a rent quarter day, thereby effectively avoiding liability to pay rent even if they remain in occupation of the property. If the company was sold quickly then this would mean in effect that the new company could trade for free for the first three months.