Administrators blocked from using Insolvency Act shortcut to recover London properties

IIC Judge Greenwood has rejected a bid by the joint administrators of Pocket Renting Limited to use section 234 of the Insolvency Act 1986 to secure vacant possession of five London properties, finding that the statutory process cannot be used to remove alleged trespassers and is confined to situations where property can be delivered, conveyed, or transferred to the officeholder.

Pocket Renting entered administration in September 2023 with 65 residential units and more than £11 million in unsecured debt. After taking control, joint administrators Gavin Maher and Matthew Mawhinney of Teneo terminated the company’s management agreement, appointed new agents, and attempted to collect rent from Investalet Limited, which held five pre-administration tenancy agreements. Investalet stopped paying rent in November 2023, ignored repeated requests for information, and continued to profit from short-term lettings.

Given the sustained non-payment and lack of cooperation, the administrators served notices to quit on 28 June 2024, which validly terminated the Investalet tenancies with effect from 31 August 2024. Despite the termination and repeated reminders, Investalet refused to return the properties, offered shifting and unsubstantiated explanations for its position, and later produced inconsistent and unreliable documents purporting to show subtenancies with a Dubai-based entity called Bleu Plan. The judge found no contractual right to sublet, no credible evidence supporting alleged repair issues, and no basis for a claimed rent free-concession.

The Court held that the administrators could not rely on section 234 in these circumstances, since section 234 cannot be used to compel someone with no lawful interest to vacate land. The Court accepted that Investalet had no right to remain in occupation once the notices to quit expired and that none of the alleged occupiers had put forward any defence. Instead, the administrators must proceed through a standard possession claim under CPR Part 55 and rely on the enforcement tools provided in Part 83.

The judgment provides much needed clarity on the limits of section 234 following the Court of Appeal’s obiter comments in Carvill-Biggs v Reading [2025] EWCA Civ 619. Where administrators face occupiers who have no valid tenancy or right to remain, section 234 is not a shortcut. The correct route is a conventional possession action and enforcement through the mechanisms in CPR Parts 55 and 83.

Read the decision here.

Marc Brittain of 3PB Barristers (instructed on a Direct Access basis) acted for Investalet, while Francis Collaço Moraes (instructed by Clyde & Co LLP) acted for the joint administrators.