Tenant failure is a big issue for landlords. Landlords are often left in a perilous position in the insolvency of a tenant. They may have huge sums of rent owing, yet they are restricted from initiating steps against a tenant subject to an insolvency process due to statutory limitations. While landlords have a proprietary interest, it is difficult for them to exercise any of the self-help remedies. This can be contrasted with a supplier, who does not (in most circumstances) have a proprietary interest, but can better its position by virtue of any pre-existing retention of title clauses, or an agreement to continue to supply the insolvent business in exchange for payments being met as an expense of the insolvency process, typically in an administration.
The key factor for a landlord when a tenant is insolvent, or is verging on an insolvency event, is to ensure that outstanding rent arrears are paid and future rents are secured as best as possible. Unless there is adequate financial protection in place (such as a rent deposit facility,
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