Court of Appeal’s Ruling in the “Game” case
26th February, 2014
The decision of the Court of Appeal in the “Game” case brings clarity to the issue of what rent an administrator or liquidator is required to pay in respect of the use of rented property for the purpose of the administration or liquidation.
The Court decided that rent should be paid as an expense of the liquidation or administration at the rate provided for in the lease for the period in which the property is occupied for the purpose of the liquidation or administration. The rent is calculated on a daily pro rata basis.
Before this judgment, if a company went into administration the day after the rent for the next period had fallen due even if the rent had not been paid the administrator could continue to use the property without paying rent until the next rent instalment fell due. This gave rise to companies picking their date to enter administration so as to take advantage of this effectively rent free period of trading.
The Game decision is clear and removes the potential unfairness for landlords leaving insolvency practitioners and landlords alike knowing where they stand.
For more information on this please contact Nick Clarke [email protected] or 01244 405558