Game over. Administrators must pay rent as an administration expense on a daily basis

By Julie Gattegno

The Court of Appeal has ruled that rent is an administration expense, payable on a daily basis for the period during which premises are retained for the benefit of the administration (Pillar Denton Ltd v Jevis & Ors, 24 February 2014).

This decision has removed the injustice caused by companies being placed into administration just after the quarter day, to avoid liability for a whole quarter’s rent being treated as an expense, and overrules two previous decisions — Goldacre and Luminar. (Under Goldacre, if rent fell due during a quarter and administrators were using the property for the purposes of the administration, the entire quarter’s rent was payable as an expense. However, under Luminar, if rent fell due before a company went into administration, none of the rent for that quarter was payable as an administration expense, even if the property was being used for the purposes of the administration.) …

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