Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Onerous property definition

What does Onerous property mean? In insolvency practice, onerous property describes estate assets or contracts that burden the estate because they cannot be realised beneficially or would expose it to continuing liabilities or obligations. The term is used and defined in insolvency legislation: in England & Wales and Scotland by the Insolvency Act 1986 (for liquidators and trustees in bankruptcy), in Northern Ireland by the Insolvency (Northern Ireland) Order 1989, and in Ireland by the Companies Act 2014 and the Bankruptcy Act 1988. Onerous property includes: any unprofitable contract; and any other property comprised in the insolvency estate that is unsaleable or not readily saleable,...

Liquidators’ disclaimer of overage under Insolvency Act 1986, s 178: unprofitable contracts, onerous property, and consequences for charges and third parties (Hindcastle; Groveholt v Hughes)

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

This Practice Note explores liquidators’ use of disclaimer in relation to contracts (commonly a sale contract or transfer) that include overage clauses or provisions, within the statutory framework for disclaiming Onerous property under section 178 of the Insolvency Act 1986 (IA 1986). It summarises what overage means, the liquidator’s power to disclaim onerous property, and whether overage can amount to ‘onerous property’ that a liquidator may disclaim in practice. It further considers how the court has applied the effect of disclaiming contracts containing overage in the decision of Groveholt Ltd v Hughes. For fuller guidance on a liquidator’s general power to disclaim onerous property, see Practice Note: The process of disclaimer by a liquidator or Trustee in bankruptcy under sections 178 or 315 of the Insolvency Act 1986. For the procedure to be followed when a liquidator disclaims onerous property, see: Checklist and timeline for disclaimer—checklist.

What is overage?

Overage, in this setting, usually denotes a device whereby the seller of property requires the buyer to make a further payment to the seller that corresponds to any increase in the property’s value arising after the sale completes...

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Carolyn Jones

Carolyn was in practice as a solicitor from 1992 until 2017, in which time she achieved a substantial reputation as an insolvency expert, advising clearing banks and a wide range of other stakeholders on all aspects of insolvency, both corporate and personal. As a partner and business owner she led the successful insolvency team at Matthew Arnold & Baldwin LLP for a number of years. She is now focussing on her career as a mediator but continues her academic work and remains closely connected to the insolvency world. She is a long-standing member of its trade association, R3.Author of:Liquidators disclaiming contracts containing overageGuide to insolvency in the retail sector...

Zachary Bredemear

Enterprise Chambers

Zachary is a barrister at Enterprise Chambers and practices in the areas of real estate litigation, commercial law, professional negligence and insolvency.He is a member of Inner Temple and was elected a Governing Bencher in 2021....

Web page updated on 21/05/2026

Popular documents

Using the Judicial College Guidelines to assess general damages in personal injury claims

When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...

Tomlin orders in England and Wales: CPR guidance on drafting, confidentiality, approval, variation, enforcement, limitation, CCA issues, court-specific requirements, sample wording and precedents

This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...

Precedent: Deed of Surrender of Lease with Optional Premium, Settlement and Release, Landlord, Mortgagee and Guarantor Consents, Reimbursement and HM Land Registry Provisions (England and Wales)

Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

Precedent Statutory Declaration: Standard Wording under the Statutory Declarations Act 1835

I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...