Federation welcomes legal ruling on rent issue

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The British Property Federation has said it is delighted with a Court of Appeal ruling that will stop retailers from operating rent free if they file for administration shortly before the rent becomes due.

The case was brought by British Land, Hammerson, Land Securities and Intu after electronic games retailer Game filed a notice of intention to appoint administrators in 2012, before the next quarter’s rent was due on March 25.

The company then appointed an administrator within the following 10 days, apparently securing a rent free period, during which the administrator could continue to operate.

The Court of Appeal ruling means that rent will now be charged on a pay-as-you-go basis – a change the BPF has long supported – and the four landlords will now receive more than £1 million in overdue rent.

BPF director of policy, Ian Fletcher, said: “The news of this ruling is hugely welcome.”