This post was written by Siobhan Hayes and Katherine A. Campbell.

This morning we got the news that HMV had gone into administration and last week it was Jessop that went under. HMV’s administrators are still trading from the stores but the administrators of Jessops have ceased trading. Can their landlords expect their rent?

Landlords have become critical of the timing of administrations. The reason is that where rent fell due before the administration it is clear that the administrators are not liable for the existing arrears. We have posted previously on the Luminar Leisure and Goldacre cases which made it clear that administrators do have to pay rent when they are occupying the property but are not obliged to pay the existing arrears.

HMV’s landlords can claim rent from the administrators from the date that the next payment is due.

Jessops landlords will be ordinary unsecured creditors and will be unable to claim rent as an expense of the administration.

Both sets of landlords will be ordinary unsecured creditors for any arrears existing at the date of the administration.

Landlords who have any potential to re-let may apply for consent to forfeit the leases but many landlords will be keen to keep the existing lease alive to avoid the liability for rates becoming theirs. No landlord can be forced to accept a surrender from the administrators but it is important not to do so inadvertently e.g. by taking the lease and keys back from the administrators.