What happens to lease renewal when the landlord is in administration? Malcolm Dowden reports
In Somerfield v Spring [2009] EWHC 2384 (Ch), [2009] All ER (D) 68 (Oct) the landlord went into administration after serving a counter notice opposing renewal of the tenant’s lease on redevelopment grounds. The landlord’s administrator sought to defer the tenant’s application for a new tenancy until it could put together a scheme of redevelopment that would satisfy Landlord and Tenant Act 1954 (LTA 1954), s 30(1)(f).
It was common ground that a landlord cannot normally defer a tenant’s application where it has no current and credible scheme for redevelopment.
However, the administrator sought to buy time by relying on the moratorium imposed by Insolvency Act 1986 that “no legal process...may be instituted or continued against the company or property of the company except with the: (a) consent of the administrator, or (b) permission of the court”.
The tenant applied to the court for permission to pursue its proceedings. In determining the tenant’s application, the court had to balance the statutory objectives of administration against the crucial issue under
