It is not uncommon for companies to be struck off the register by Companies House. This is often as a result of a failure to lodge annual accounts or an annual return in time and, whilst this is far from ideal for the company itself, it can also cause landlord’s a headache as well.
When a company is struck off the register, any property held by it, including interests in leases, are deemed to be bona vacantia. This translates literally; bona vacantia means “ownerless goods”. Therefore the ownership of such assets reverts to the Crown.
For a Landlord, this would mean that the tenant of the lease would now be the Crown and the lease would remain in existence. This would likely cause problems moving forward when a new tenant was found for the property.
In such circumstances, the Crown is not obliged to deal with the property in any particular way and they do not accept liability under any of the tenant covenants in the lease that is now vested in them.
In order to have the lease formally, and prematurely, concluded the Landlord can apply to the Treasury Solicitor in order to forfeit the lease. The consent of the Treasury Solicitor will need to be provided and there is a fee payable for this, in the form of a fee grant disclaimer. The Crown has 12 months from the request of the Landlord in which to decide whether to relinquish its rights to the lease.
The Crown may agree to assign the lease to a new tenant provided that the Crown is fully protected by a release signed by the Landlord in a form prescribed by the Crown.
The other alternative, perhaps more attractive if the former tenant is in rent arrears or if the property is in poor repair and condition, is for the Landlord to apply to have the tenant company restored under the Companies Act 2006.
If restored, the general consensus is that the Company is as if the dissolution has never happened and therefore the property once again belongs to the tenant. The risk for the Landlord here, should the tenant be in rent arrears, is that although the company can now be pursued for the debt, their interest in the lease remains and they may continue to occupy the property.
For further legal advice on this matter or any matters relating to commercial leases or commercial property disputes, speak to Farleys’ commercial property team on 0845 287 0939 or contact us by email.