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Commercial property update: rent recovery, best endeavours, flood risks

Magnus Hassett, Tim Taylor and Jonathan Ross consider 
the recovery of rent in a tenant administration, the pitfalls of best endeavours obligations, the National Planning Policy Framework and flood risk and buildings insurance

15 May 2012

Recovery of rent in a tenant administration

There have recently been various high-profile retail administrations – in particular arising after each rent quarter day. In many cases, administrators have continued trading from premises pending a sale of the business or to sell off remaining stock. The uncertainty as to whether landlords can recover rent in those circumstances, as an expense of the administration in priority to other creditors, has been settled in the judgment on 28 March 2012 in the claims made by X-Leisure against various companies in the Luminar Leisure Group to recover rent arrears totalling £220,000. The current legal position regarding recovery of rent where an administrator continues trading from a leasehold property is therefore as follows:

Where there are already rent arrears: administrators are not liable for rent arrears or to pay any sums that have arisen due befo...

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