The following Property Disputes Q&A provides comprehensive and up to date legal information covering:
Sub-tenants may remain in possession following a disclaimer of the head-lease, since the head-lease is only determined as between landlord and tenant but not (in the same way) as between tenant and sub-tenant.
This is explained in Chapter 5 of Butterworths Property Insolvency, at 5.26 under the heading ‘What is the effect of disclaimer?’
The sublease continues in a manner sufficient to give effect to the sub-tenant's continuing right to possession. However the head-landlord is not bound to respect the terms of the sub-lease. He can re-enter or exercise his other proprietary remedies if the terms of the disclaimed lease are not adhered to. The unwelcome consequence of this for the sub-tenant is that he de facto becomes liable to perform the head-lease obligations in order to remain at the premises. Therefore, while the sub-tenant does not have directly enforceable liability to perform the obligations in the disclaimed lease—as there is no direct legal
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