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Joshua, Lawyer
Category: Property Law
Satisfied Customers: 26070
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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Good afternoon. I was a trustee church charity and as

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Good afternoon. I was a trustee for a church charity and as a trustee, I signed the lease in 2011 for the church so they could sublet to another tenant. The property unfortunately was not rented and the charity managed to pay the rent up to a point and defaulted on the rent. We as the trustees were taken to court and made bankrupt by the landlord last year June 4th 2014. All the monies outstanding was paid off my a third party and I resigned as a trustee during my bankruptcy. This has been annuled in october 2014. My question is can the lease be resurrected after my bankruptcy has been annulled. The landlord has again served me with an insolvency demand and I don't know what to do or how to respond.
Hello and thank you for your question. I will be very pleased to assist you. I'm a practising lawyer in England with over 10 years experience. May I confirm which third party paid off the rent please? Was this an obligation or a payment of good will on the third parties part?The subletting tenant that defaulted, do I assume that tenant was wound up? Did you take any guarantees for the rent from the subletting tenant?
Customer: replied 2 years ago.

The third party that paid off the money and other rent arrears that the judgement was for were members of my family and I have to pay the monies back to all of them.

The property though leased by the church up till now could not get a tenant to rent it has remained empty from the day the lease was signed. We were just church members who trusted the pastor of the church who was a friend to the landlord.

The second property which I am contesting again the same landlord took this one over and said he would deal with the tenant directly. this was a verbal discussion between himself and the pastor. I think that tenant has since left the place and they have not been able to find him, then he decided to come after the trustee of which I am no loner a trustee

I hope this helps

Thank you. Finally could you advise why members of your family paid off the rent if the landlord moved to make you bankrupt. Did the landlord apply for bankruptcy before or after the rent was paid?
Customer: replied 2 years ago.

The landlord made the bankruptcy application before the rent was paid. It was a rent arrears of over 2 years. The church could not pay bankruptcy judgement was issued and the two trustees were made bankrupt. I have a small business that I run and was quite emotional about the whole business. The bankruptcy I felt would affect my business as the only director and would be difficult for me to run the business if I chose to sit out the bankruptcy, so I set out to get it annulled and was told the only way would be to pay off all the people I owe money to credit cards, loans etc and the rent arrears

Thank you for the above. I think my last question is what happened regarding the annulment application? Was it refused? I note from what you say above that your bankruptcy stands?
Customer: replied 2 years ago.

No. The annulment was successful because all debtors were paid off as expected before annulment. Petitioned the court with evidence that all debts had been paid and bankruptcy was annulled last year october

Thank you for the clarification. Finally in that case did the landlord take steps to forfeit the lease by peaceable reentry or has he never done so but rather sought to continue to charge rent?
Customer: replied 2 years ago.

we approached him and said we would like to surrender the lease, he refused even though he knows the place has never been rented even up till now. He sought to continue to charge rent

Thank you. As you will be aware the effect of annulment is in effect that the bankruptcy order did not occur. Any disposals made by the trustee in bankrtupcy are not cancelled but otherwise any debts and obligations you had before the bankruptcy order remain. The landlord almost certainly would have the right to forfeit the lease f the rent remained unpaid for usually between 14 and 28 days and in the event of bankruptcy. I had been hoping you would say that he did so but if he has not then the lease remains and accordingly the rent remains due. It is worth noting that the landlord may have forfeited the lease without intentionally doing so. If he reentered the property and secured it from you entering then this can amount to forfeiture. If he has not done so though and the premises has remained continually available to you then as you suggest he has not forfeited the lease. You ask if the lease can be resurrected. The lease does not dematerialise automatically on bankruptcy. Rather your obligations under the lease transfer to the trustee in bankruptcy and the landlord will often in the circumstances cut his losses and forfeit the lease so he can relet the premises quickly. Had your landlord done so then he cannot attempt to resurrect the forfeited lease following annulment. The forfeiture is final. However if he did not forfeit the lease, then the obligations under the lease remain. If you are discharged fro bankruptcy then these obligations fall away at that point but if the order is annulled then as above the position is restored and the lease obligations remain - they never went away unless forfeited. Accordingly it is worth satisfying yourself if you are not already certain that the landlord has not inadvertently forfeited the lease as above. If he has not then you will need to look at urgently seeking to assign the lease to a third party. One final point is that if you received any advice prior to signing the lease as trustee as you should have done, you may consider looking at that advice as to whether it was negligent because a solicitor should have strongly warned of the onerous nature of the lease obligations you were taking on as trustee and should have recommended indemnity or insurance to indemnify you from personal liablity. If a solicitor failed to provide this advice ou may be able to claim for loss against the professional advisor for negligence I hope the above is of assistance though I am sorry I am not able to give you more positive news. There are a couple of points above worth looking at closely - whether the landlord inadvertently forfeitd and potential negligence of any professional advisor. If you have no further questions for now I should be very grateful if you would kindly take a moment to click to rate my service to you today or just reply back to let me know if the above is helpful. Your feedback is important to me. If there is anything else I can help with please reply back to me I'd be very grateful
Customer: replied 2 years ago.

Thanks for your response. Was not the answer I wanted but I suspected it would be. How then can I survive this. Are you saying there is no loop hole any where to get out of this.

In my view there is a big questionmark over the advice you were given in signing the lease as a trustee. I am not sure if you took advice. If you did it would seem prudent to look at the advice you received. There may a negligence claim available.Apart from that if you cannot show that the landlord forfeited the lease as above, clearly you likely need to look at finding a replacement tenant as soon s possible to take over the lease - stemming further rent obligations presumably has to be a priority. Local business letting agents may be able to assist in finding a tenant. Even if you could get a short term sub tenant in place at a subsidised rent for a little while it could help pay the bills until a longer term tenant can be found to take a lease assignment. Alternatively if there are any break provisions in the lease allowing you to break the lease these could be exercised.I assume you are not the only trustee that signed the lease? If not all trustees are jointly and severally liable so you can ask the other trustees to share the obligations with you.Finally there is the option potentially of an IVA. I am sure you have heard of these - they are an alternative to bankruptcy which allows you to negotiate a certain number of years of paymens after which your debts are wiped out. Crucially you can remain a director whilst in an IVA. However how much sense that makes now if your family have already paid off debts I am not so sure.There is a free advice line that can give you free advice and support generally with debt which can be contacted using the following link: I hope the above is helpful? Can I help you with anything else or has the above answered your questions satisfactorily? If you could drop me a quick message to let me know I'd be very grateful.
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