Game Group's appeal against a landmark decision forcing retailers to pay rent even after they have filed for administration has been rejected by the Supreme Court.
The test case was brought by landlords British Land, Hammerson, Land Securities and Intu, and the February ruling in their favour paved the way for so-called “pay as you stay” rules to be introduced.
Previously administrators had to carry the cost of unpaid rent as an expense, and in the case of Game meant it had three months rent-free while part of the business was sold on to private equity group OpCapita.
Today's rejection by the Supreme Court was greeted as “a relief” by the British Property Federation.
Director of policy Ian Fletcher said: “Had the appeal been allowed, the property industry would have been stuck in a state of flux with a longer wait for an answer to this critical question. As it is, common sense has prevailed and those administrators who had been holding back on paying rent due to landlords will now have to accept the inevitable.
He added: “The decision has paved the way for a much fairer and sensible system and we would like to see the Insolvency Service take steps to ensure that this case is used as best practice for all future retail insolvencies, to ensure that landlords’ interests are safeguarded in the future.”