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Companies Act 1993

Voluntary administration - Administrator's liability and indemnity for debts of administration

239ADI: Administrator's liability for rent

You could also call this:

“Administrator must pay rent for company property after 7 days of administration”

When a company is in voluntary administration, the administrator becomes personally responsible for some of the company’s payments. This responsibility starts more than 7 days after the administration begins. It applies to rent and other payments for property the company uses, occupies, or possesses.

The administrator’s responsibility continues as long as the company keeps using the property and the administration is ongoing. However, it can end earlier if:

The administration finishes
The administrator stops being in charge
Someone else takes control of the property, like a receiver or a secured creditor

Even though the administrator is responsible for these payments, they haven’t officially taken over the company’s agreement about the property. The administrator is only responsible for the payments described here, not for anything else in the agreement.

It’s important to know that the company still has to pay for the rent and other payments it owes under the agreement. The administrator’s responsibility doesn’t replace the company’s responsibility.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321620.

Topics:

Business > Industry rules

Business > Fair trading

239ADH: Administrator liable for general debts, or

“Administrator must pay for debts incurred while managing the company”

239ADJ: Administrator not liable for rental if non-use notice in force, or

“Administrator not required to pay rent for unused property during voluntary administration”

Part 15A Voluntary administration
Administrator's liability and indemnity for debts of administration

239ADIAdministrator's liability for rent

The administrator is personally liable, to the extent specified in subsection (2), for rent and other payments becoming due by the company under an agreement—
made before the administration began; and
relating to the use, possession, or occupation of property by the company.

The administrator is liable for rent and other payments that accrue in the period—
beginning more than 7 days after the administration begins; and
throughout which—
1. the company continues to use or occupy, or be in possession of, the property; and
2. the administration continues; and
ending on the earliest of the following:
1. the end of the administration; or
2. the administrator ceasing to hold office; or
3. the appointment of a receiver of the property; or
4. the appointment of an agent by a secured creditor of the property, under the provisions of a charge over the property, to enter into possession or to assume control of the property; or
5. when a secured creditor takes possession or assumes control of the property under the provisions of a charge over the property.

The administrator is not taken, because of subsection (2),—
to have adopted the agreement; or
to be liable under the agreement except as set out in subsection (2).

This section does not affect the liability of the company for rent and other payments due under the agreement.

Compare

Corporations Act 2001 s 443B(1), (2), (7), (9) (Aust)

Notes

Section 239ADI: inserted, on 1 November 2007, by section 6 of the Companies Amendment Act 2006 (2006 No 56).