Onerous property Definition

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GLOSSARY

What does Onerous property mean?

Onerous property (including a contract) is any unprofitable contract and any other property comprised in the insolvency estate which is unsaleable, or is such that it may give rise to a liability to pay money or perform any other onerous act.

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What is considered onerous property or contracts?

DisclaimerUnder sections 178 and 315 of the Insolvency Act 1986 (IA 1986), a liquidator or a trustee in bankruptcy (trustee) has the power to disclaim property belong to the company or bankrupt which they consider to be onerous. This Practice Note considers the position of a liquidator, but the principles are the same a trustee.For more detail on disclaimer, what it is and what the process is for invoking it, see:•Disclaimer—overview•Practice Note: The process of disclaimer by a liquidator or trustee in bankruptcy under sections 178 or 315 of the Insolvency Act 1986•Practice Note: The effect of disclaimer by a liquidator or trustee in bankruptcy on property and third parties. This Practice Note covers what is considered in practice as ‘onerous’ in this context.What is onerous property?IA 1986, s 178(3) defines onerous property as:•any unprofitable contract, and•any other property of the company which is unsaleable or not readily saleable or is such that it may give rise to a liability to pay money or perform any other onerous actIA 1986,...

Liquidators disclaiming contracts containing overage

This Practice Note considers the disclaimer by liquidators of contracts (often a sale agreement or transfer) containing overage provisions, in the context of disclaimer of onerous property under section 178 of the Insolvency Act 1986 (IA 1986). It provides a summary of what overage is, the disclaimer of onerous property by a liquidator and whether overage can be considered ‘onerous property’ so that it is something that a liquidator can disclaim. It also considers the application by the court of the effect of the disclaimer of contracts containing overage in the case of Groveholt Ltd v Hughes.For more detailed reading on disclaimer of onerous property by a liquidator generally, 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 adopted by a liquidator on disclaiming onerous property, see: Checklist and timeline for disclaimer—checklist.What is overage?Overage, in this context, generally refers to a mechanism whereby the seller of a property imposes an...

Discover our 3 Practice Notes on Onerous property

178 Power to disclaim onerous property

(1) This and the next two sections apply to a company that is being wound up in England and Wales.(2) Subject as follows, the liquidator may, by the giving of the prescribed notice, disclaim any onerous property and may do so notwithstanding that he has taken possession of it, endeavoured to sell it, or otherwise exercised rights of ownership in relation to it.(3) The following is onerous property for the purposes of this section—(a) any unprofitable contract, and(b) any other property of the company which is unsaleable or

315 Disclaimer (general power)

(1) Subject as follows, the trustee may, by the giving of the prescribed notice, disclaim any onerous property and may do so notwithstanding that he has taken possession of it, endeavoured to sell it or otherwise exercised rights of ownership in relation to it.(2) The following is onerous property for the purposes of this section, that is to say—(a) any unprofitable contract, and(b) any other property comprised in the bankrupt's estate which is unsaleable or not readily saleable, or is such that it may give rise to a liability to pay

Onerous property is referenced 2 in UK Parliament Acts

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