When is a Mortgage Not a Mortgage?

There is a mechanism under the Bankruptcy and Insolvency Act (“BIA”) where a Trustee in Bankruptcy, with the Courts permission, can sell property of the bankrupt that is the subject of a security interest, and the Court can order that the security be cancelled and the property sold free and clear.
A lender that holds a [...]

Tenant Insolvency: Occupation Rent

Occupation rent is payable for the time the Trustee actually occupies the premises.  If the Trustee does not actually occupy the premises it is not liable for occupation rent.  The question then becomes: When is the Trustee actually in occupation?  
The Courts have found that the Trustee must actually be in occupation in order for [...]

Landlord Insolvency: Entering into New Leases

Unless this power is specifically set out in the security agreement, an instrument appointed Receiver does not have this power. A Court appointed Receiver will only have this power if it set out in the Court Order. It is advisable to use the services of a leasing Agent when entering into new lease [...]

Landlord Insolvency: Lease Renewals

Generally the security agreement or Court Order will allow the Receiver to renew leases. If the power is not specifically provided for the Receiver may apply for the power to renew. Caution should be exercised when renewing long term leases as it may impact on the overall value of the property.

Landlord Insolvency: Ability to Terminate Leases

If a landlord entered into a lease with a tenant subsequent to the granting of the security over which the Receiver has been appointed, the Receiver may be in a position to adopt the lease or terminate it and claim possession of the premises. However, prior to doing so, the Receiver should be cautious [...]

Landlord Insolvency: Priority over Tenants

The appointment of a Receiver over a landlord will usually place the Receiver in the same position as the landlord with respect to leases which are in effect at the time. Therefore, all powers which the landlord may have remain in effect.  As well, there may be certain obligations that the Receiver will inherit in [...]

Tenant Insolvency: Protection from the Landlord

This is likely the most common situation for insolvency practitioners to encounter. 
Tenants generally try to keep their payments to their landlord up to date, due to the rights and remedies available to landlords.  Landlords generally have either a statutory, contractual and common law remedy available to them to enforce payment of rent including the [...]

Intro to Landlord Tenant Issues in Insolvency

 
As an insolvency practitioner we are often involved in situations that include landlord and tenant issues.  We are either dealing with a tenant or landlord that is insolvent, or we are acting on behalf of a lender who has taken security over real property.  In all of these situations the insolvency practitioners must be aware [...]

Tenant Insolvency: Trustee’s Right to Occupy

The Commercial Tenancy Act (“CTA”) allows a Trustee to occupy the debtor’s premises for three months following the date of the bankruptcy unless the lease has been terminated before bankruptcy or unless the tenancy is a monthly one. However, in our view, the Trustee has a right to three months occupancy even in the [...]