Disclaimer

Disclaimer

What is disclaimer?

Disclaimer is a statutory procedure which empowers liquidators and trustees in bankruptcy (trustees) to disclaim any onerous property (sections 178–182 (liquidation) and 315–321 (bankruptcy) of the Insolvency Act 1986 (IA 1986)).

Onerous property is in each case defined in IA 1986, ss 178(3) and 315(2) as:

•
any unprofitable contract
•
any other property which is unsaleable or not readily saleable or is such that it may give rise to a liability to pay money or perform any other onerous act

Disclaimer is most commonly sought in relation to leasehold land but is not limited in its application to leaseholds. It can apply to any onerous property or contract including unpaid shares, interests in a joint venture and any form of uncompleted contract.

For further reading on what constitutes onerous property (and is therefore capable of being disclaimed), see Practice Note: What is considered onerous property or contracts?

Once disclaimer has occurred then, unless and until a vesting order is sought and obtained, any disclaimed property which is not determined by the disclaimer (eg a freehold interest in land) vests in the crown

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