Landlords be warned - don´t abandon your security

A warning when completing a proof of debt form following the insolvency of a tenant. A failure to declare security for money owed by the tenant could be taken to be landlord’s consent that such security can be used for the general benefit of all creditors.

In the recent case of LCP Retail Limited -v- Segall a tenant fell into arrears. The landlord instructed bailiffs to distrain and a walking possession agreement – a WPA- was made. Certain goods were set to be removed from the premises and sold to discharge the arrears unless payment was received within a certain period. Only part payment was received following which the landlord inspected the property and agreed in correspondence with the tenant to market the property for re-letting but insisting the tenant first cleared it of everything.