Landlords with insolvent tenants will be pleased to see this latest decision from the High Court, confirming that standing up to the demands of the administrators to assign the lease can in the end pay dividends.
The recent High Court decision in Lazari Investments v Saville & Ors, which involved the Strada restaurant chain, should provide some comfort for landlords that often face frustrating experiences when a tenant goes into administration. The Insolvency Act moratorium protects the insolvent tenant from forfeiture and the landlord frequently finds that a third party is allowed to occupy its property on a licence from the administrators. Negotiations for an assignment of the lease or for a new lease can be protracted. Landlords can feel constrained to negotiate with this party even though they would prefer to expose the property to the open market.