Landlord's Strategies in Administration

Scotland
01/10/2010
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Although the decision in the Cheshire West and Chester Borough Council case strengthens a landlord’s position it does not significantly alter the action which a landlord should take when a tenant goes into administration. When this happens a landlord should:

Try to ascertain what the situation on the ground is e.g. is the tenant still trading or is a licensee in occupation? Are there still tenant’s goods at the property?
Remember this case means that any sign of occupation or use will enable a landlord to argue that rent falling due during this time is an expense of the administration, rather than an unsecured claim.
Write to the administrators to try and obtain an early indication of their intentions for the property. Clarify if they wish to give up the lease, an assignation of the lease or a licence to occupy with a third party purchaser?
Continue to demand payment of rent and other payments due under the lease promptly from the tenant in administration and argue that they are all an expense of the administration and so payable in priority to other claims.

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