Rent as an expense of the administration: an update

We reported in our last newsletter that the High Court has granted permission in the Games Station administration on the question of the circumstances in which rent and service charges are to be treated as an expense of an administration. 

The current position, following Goldacre and Luminar, is that rent and service charges payable in advance and which fall due before the appointment of an administrator are not considered an expense of the administration, but where such rent falls due during a period when the administrator was occupying the property for the purposes of the administration, then the whole sum ranks as an administration expense. 

In the Games Station administration, the court ordered that the arrears of rent falling due before the date of the administration were not payable as an expense in the administration and therefore ranked as unsecured claims. Rent falling due during the course of the administration was payable as an administration expense. The landlords were given permission to appeal on the first point and the buyers of the business in occupation of premises under licence from the administrators were given permission to appeal on the second point…

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