Administrators Paying Rent

A commercial landlord should never assume that, if his tenant goes into administration or liquidation, he will not be able to obtain rent from the administrator or liquidator in respect of the period following appointment of the administrator or liquidator.

A number of court cases in England have established that a commercial landlord has a qualified entitlement to receive rent from the administrator or liquidator in circumstances where the administrator or liquidator uses the premises for the purposes of the administration or liquidation.

The entitlement is qualified because, in any insolvency, monies are limited and are paid out to creditors according to their respective positions in the pecking order. Moreover, if two or more creditors share a particular place in the pecking order, they each might have to accept that neither will receive every penny due to them.