Property Related Insolvency

What is property related insolvency? 

Property related insolvency is the term used to describe the situation where a tenant (whether an individual or a company) is unable to meet their financial obligations, such as rental payments, due to debts exceeding their assets.   In some cases this may result in the tenant entering into  formal insolvency proceedings, such as an Individual Voluntary Arrangement (IVA), bankruptcy (ifor individuals)m or liquidation, Company Voluntary Arrangement (CVA), or administration (fora companies).

How we can help:

We provide expert advice on navigating property-related insolvency issues, including:

• Options relating to rent arrears: we will also consider and advise on the commercial implications of the options available  e.g.
  
  • Assessing the reasons for non-payment. Is this a one-off short term cash flow event and if so, is it in the client’s commercial interests to take possession of the property via forfeiture? 
  • If repossession is not required, advising on strategies to recoup arrears and prevent future occurrences. For example, determining whether a rent guarantor was involved or if the tenant paid a rent deposit deed,  agreeing an repayment plan with the tenant.
  • Exploring options for repossession via forfeiture if necessary. Determining if the client has the right to forfeit and if so, has it been waived. If there are issues with exercising the right to forfeit then will that take place by peaceable re-entry or via court proceedings. 

Tenant insolvency implications: 

• Evaluating the impact of the tenant entering into a formal insolvency process and lease agreements. 

Lease termination options:

• Advising on whether the lease terminates automatically upon insolvency or if further legal steps are required.