Administrators beware (but good news for landlords)

In Goldacre (Offices) Ltd v Nortel Networks UK Ltd (in administration) [2010] All ER (D) 54 (Jan), the respondent company held two long leases over properties of which the claimant was the landlord. During the respondent company’s administration, parts of each of the premises were used by the administrators from which to conduct the administration, and there were sub-tenants in other parts of the properties. The landlord brought proceedings seeking confirmation that rent was payable as an expense of the administration.

The Court held that rent would continue to be payable as an administration expense quarterly in advance under the terms of the two leases whilst the administrators retained or used any part of the premises for the benefit of the administration.  Applying the principles imposed in liquidations, the Court held that an administrator electing to hold leasehold premises could do so only on the terms and conditions of the lease, and any liability incurred while the lease was being enjoyed or retained for the benefit of the administration was payable in full as an expense.