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Landlord’s Rights: Enforcement Options in Insolvency
Thursday, March 7, 2019

When dealing with a debtor or a tenant that has fallen behind with its payment obligations, one of the most cost effective ways of a creditor/landlord reducing its exposure against that entity will be to take advantage of a “self-help” remedy, such as taking possession of the entity’s assets and selling them in repayment of the sums owed.

However, when the entity is the subject of insolvency proceedings, the availability of the various self-help remedies varies depending on:

  1. Which enforcement method the creditor intends to take;
  2. Which specific insolvency procedure the debtor is in; and
  3. At what point during that insolvency process the creditor seeks to take that step.

We have prepared a table summarising each of the variables identified above, which can be accessed here.

Depending on the type of “self help” remedy exercised and when it is exercised will determine whether the landlord can retain the benefit of it.  For example, monies received following the sale of goods may have to be paid over to the insolvent estate for the benefit or all creditors if the sale occurs post insolvency.

In most cases, the earlier the decision to take advantage of and exercise the “self help” remedy the better the outcome for the landlord.

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