Q&As

Where a lease is disclaimed leaving a sub-tenant in place paying rent to the freeholder, what options does the freeholder have while the sub-tenant continues to observe the terms of the head lease? If the head lease included the right to forfeit on the insolvency of the tenant, could the freeholder now forfeit or has the right been waived?

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Produced in partnership with Chris Bryden of 4 King’s Bench Walk
Published on: 17 September 2019
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Where a headlease is disclaimed, the subtenant continues to have the right to occupy and must pay the rent and comply with the covenants under the headlease. The effect of sections 178(4) and 315(3) of the Insolvency Act 1986 (IA 1986) (depending on whether the headlessor is a company or an individual) is to bring to an end the rights and obligations of the immediate parties to the lease but does not affect the rights or liabilities of any other person. Although the headlease has ceased to exist it is deemed to continue in respect of the rights and liabilities of third parties such as subtenants. The landlord is not able to enforce the tenant covenants

Chris Bryden
Chris Bryden

Barrister, 4 King’s Bench Walk

Chris was called to the Bar in 2003 and since that time has built a busy practice across a range of areas, with an emphasis on Chancery practice. He enjoys a well-deserved reputation for his knowledge and expertise in each area. He appears regularly in the County Court, Family Court and the High Court as well as various specialist Tribunals, and has been involved in cases up to and including the Supreme Court. He regularly is instructed at Appellate level. He has extensive and wide-ranging experience particularly in the areas of wills, probate and inheritance disputes; property including adverse possession, boundary disputes and issues arising out of trusts of land; company and commercial work and financial remedies. Chris is head of the Family Group and head of the Property Team at 4KBW.

Chris is the author of numerous articles in publications such as the New Law Journal, Counsel and Family Law, amongst many other titles, and is the co-author of Social Media in the Workplace: A Handbook (2015, Jordan Publishing).

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Options definition
What does Options mean?

The right, but not the obligation, to buy or sell a fixed quantity of a commodity, currency or security at a fixed price, on or until a particular date.

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