The British Property Federation (BPF), has expressed its delight at the news that the Court of Appeal has ruled in the landlord’s favour in the Game trial, overruling the law on rent payment during administrations.
British Land, Hammerson, Land Securities and Intu will now receive over £1millions’s worth of overdue rent, in a move which will have a huge impact on the retail insolvency system. The ruling means that rent will now be charged on a pay-as-you-go basis, putting an end to ‘tactical’ administrations which enables retailers to operate for free if they file for administration just after quarter day.
The BPF has long supported a pay-as-you-go system for retail administration, pointing out how the current legislation lies heavily in the retailer’s favour. Moving to a pay-as-you-go basis for rent will increase fairness in the system not only for the landlord, who will receive the rent that they are due, but also to the insolvency practitioner, who will benefit from increased flexibility.
Ian Fletcher, Director of Policy at the British Property Federation, commented: “The news of this ruling is hugely welcome, and it is excellent to see that common sense has prevailed. This is the fairest outcome for all, as it means that means landlords get paid and that insolvency practitioners can trade over the best timeframe for the rescue of the business. It is patently unfair that landlords’ property could be used without payment of rent. We welcome the hard work that all involved have put into pursuing this judgement which will benefit all.”
Game filed for administration just before quarter day in March 2012. British Land, Hammerson, Land Securities went to court on 12-23 February 2014 to claim back missing rental payments. is a B2B online publication for the UK business community.
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