Katie Cohen is a Partner at Child & Child as well a a full member of the Association of Leasehold Enfranchisement Practitioners (ALEP).

For this article, Katie focuses on how leaseholders can acquire the freehold from a bankrupt freeholder.

A bankrupt individual is someone who has been adjudged by an order of the court as being unable to pay their debts. An individual who believes they are insolvent may petition the Court for their own bankruptcy or a creditor may issue a bankruptcy petition against such an individual in a County Court or the High Court.

Once an individual is adjudged bankrupt a Trustee in Bankruptcy (“the Trustee”) is usually appointed to realise the bankrupt individual’s assets and distribute the proceeds of sale amongst the creditors. Often, the only significant asset of most bankrupt individuals is the property in which they reside.

Where the property is not the bankrupts principal residence, and once a bankrupt order has been made against the individual, any equity they may have in property will vest in their Trustee. By virtue of Section 306(2) of the Insolvency Act 1986, such property shall vest in the individual’s bankruptcy estate without any conveyance, assignment or transfer.

When a property is solely owned by a bankrupt individual the legal interest in that property also automatically vests in the Trustee. In such cases, the Trustee can apply to the Land Registry to become the registered proprietor.

In practice, however, the Trustee does not always apply to the Land Registry to become the registered proprietor of the property and the bankrupt individual usually remains registered as the legal owner of the property.

The property (or any equity in the same) will remain vested in the Trustee at his/her discretion for the benefit of the creditors, until the property is sold or otherwise disposed of. It is important to note that the property does not revest in the bankrupt individual at the date of his discharge from bankruptcy.

A Section 13 Notice may be served on the Trustee as he/she is acting as the landlord for the time being and is bound by the provisions of the Leasehold Reform, Housing and Urban Development Act 1993 to respond as the landlord.

For further information on this and other leasehold services provided by Child & Child, please contact Katie on:

Tel: 020 7201 1865

e-mail: [email protected]


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