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Companies Act 1993

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

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

You could also call this:

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

When a company is in voluntary administration, the administrator doesn’t have to pay rent for property the company isn’t using. This applies when the administrator sends a ‘non-use notice’ to the property owner or lessor.

You need to send this notice within 7 days of the administration starting. The notice must say which property it’s about and that the company won’t be using it or exercising any rights over it.

The non-use notice stops working if the administrator cancels it in writing or if the company starts using the property or claiming rights to it. Just being in the property doesn’t count as using it, unless the company actually uses it or tells the owner they have a right to stay there.

Even if there’s a non-use notice, the company still has to pay rent and other costs for the property. The notice only stops the administrator from being personally responsible for these payments.

You can find more information about when the administrator is liable for rent in section 239ADI.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321621.

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

239ADJAdministrator not liable for rental if non-use notice in force

  1. The administrator is not liable under section 239ADI for any period for which a non-use notice is in force.

  2. In this section, non-use notice means, in relation to the property to which it refers, a notice that—

  3. is given by the administrator to the owner or the lessor of the property within 7 days after the administration begins; and
    1. specifies the property to which it relates; and
      1. states that the company does not propose to use the property or otherwise exercise any rights in relation to it.

        1. A non-use notice ceases to have effect if—

        2. the administrator revokes it by written notice to the owner or lessor; or
          1. the company exercises, or purports to exercise, a right in relation to the property.

            1. In subsection (3)(b), the company does not exercise, or purport to exercise, a right in relation to the property merely because the company continues to occupy, or to be in possession of, the property, unless the company—

            2. also uses the property; or
              1. asserts a right, as against the owner or the lessor, to continue to occupy or be in possession.

                1. A non-use notice does not affect the company's liability for rent and other payments.

                Compare
                • Corporations Act 2001 s 443B(3)–(6) (Aust)
                Notes
                • Section 239ADJ: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).