Subrogation and non-payment of rent

Explains the equitable doctrine of subrogation as it applies to tenants, assignees and landlords. Outlines the basic principle of subrogation and examines how the principle affects the legal position of the original tenant, the tenant's assignee, the tenant's surety and the original landlord.

A just claim?

Discusses the law relating to the payment of occupation rent to a co-owner by the party remaining in the property after a relationship breakdown both under the Trusts of Land and Appointment of Trustees Act 1996 and where the Act is not applicable. Considers, with reference to the Chancery Division decision in Re Barcham, whether a trustee in bankruptcy acting on behalf of the non-occupying person can claim an occupation rent under the court's equitable jurisdiction.

Showing interest

Comments on the Chancery Division judgment in Jones v Kernott on the beneficial interests of former cohabiting partners in their family home. Considers whether the partners must have intended to vary their shares when the man stopped paying the mortgage, bought a house in his own name and went to live there. Discusses whether the court could take into account what was considered fair between the partners based on the whole course of dealing, including non-payment of maintenance for children.

Financing of SME's: an asset side story

The main sources of financing for small and medium sized enterprises (SMEs) are equity (internally generated cash), trade credit paid on time, long and short term bank credits, delayed payment on trade credit and other debt. The marginal costs of each financing instrument are driven by asymmetric information (cost of gathering and analysing information) and transactions costs associated with non-payment (costs of collecting and selling collateral). According to the Pecking Order Theory, firms will choose the cheapest source in terms of cost. In the case of the static trade-off theory, firms choose finance so that the marginal costs across financing sources are all equal, thus an additional Euro of financing is obtained from all the sources whereas under the Pecking Order Theory the source is determined by how far down the Pecking Order the firm is presently located. In this paper, we argue that both of these theories miss the point that the marginal costs are dependent of the use of the funds, and the asset side of the balance sheet primarily determines the financing source for an additional Euro. An empirical analysis on a unique dataset of Portuguese SME's confirms that the composition of the asset side of the balance sheet has an impact of the type of financing used and the Pecking Order Theory and the traditional Static Trade-off theory are rejected.