The highly skilled commercial property team have substantial experience in acting for Insolvency Practitioners when dealing with the sale and disposal of distressed properties.
All businesses will face financial challenges at some point. Whatever the situation, we will ensure that you receive the best advice for your circumstances.
If you become insolvent as a landlord, you will need to notify your tenants. This will come in the form of a letter from the appointed insolvency practitioner and aims to inform the tenant of the current situation.
If the landlord’s company goes into liquidation, it may be that creditors decide that the best way to recover the largest proportion of the debt is to break up the company and its assets. This will mean that property freehold is likely to be put up for sale.
This will trigger the scenario known as ‘the leaseholders’ collective right of first refusal’ allowing the tenant the right of first refusal and is given the chance to buy the property before it can be sold to a third party.
However, the liquidator may decide to disclaim the freehold if it has no value or the value cannot be easily achieved. This relieves the liquidator from the responsibility and liability for the property and the property reverts to the Crown. The tenant continues the occupation of the property as a tenant against the Crown under the same terms and duration of the original lease.
An important consideration for the tenant is the ongoing property maintenance requirements. The Landlord and Tenant Act 1987 provides a clause for the leaseholder, where its freeholder ceases to exist, has the right to apply to the First-tier Tribunal for the formal appointment of a manager and receiver.
This can be a long and complex process, but our team of experienced and friendly solicitors will be on hand to guide you and answer any questions you may have.
Where a tenant is paying rent and otherwise complying with its obligations there would usually not be any reason to change anything.
Where a tenant fails to pay rent, the landlord may need to consider the reason for the non-payment and what options are available. These are:
- Exercise commercial rent arrears recovery (CRAR)
- Sue for rent by court action
- Forfeit the lease for non-payment of rent
If the tenant fails to pay because they are, or will become, insolvent, then the above options may be restricted by the Insolvency Act 1986.
The corporate insolvency regimes are:
- Company Voluntary Arrangements (CVAs)
- Winding up, or liquidation, when can be voluntary or compulsory
Individual regimes are:
- Individual Voluntary Agreements
If you are experiencing any issues with non-payment of rent, either as the tenant or landlord, our highly knowledgeable and pragmatic team will advise you on the best course of action ensuring any risks or disputes are kept to a minimum.
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