Update On Landlords Rights Against Tenants In Administration

We have written before on the subject of Landlords' remedies when there is a pre-pack administration where a new company is formed to buy the viable part of the business and is put into occupation by the administrators without even prior notice to the landlord let alone landlord's consent.

Although the new company may have been given a licence by the administrator, that amounts to unlawful occupation and a breach of the tenant's alienation covenants in the lease as far as the landlord is concerned. Normally the unhappy landlord could bring an action against the tenant company for breach of the lease

In some tenant insolvencies the landlord might be happy to accept the new company's occupation and so will permit a formal assignment of the lease to them. However, in many cases, the landlord will view the new company as being at least as risky a covenant as the tenant that has gone bust and will want to remove them as soon as possible in order to re-let at a market