Mortgagee or Liquidator Sales of JTC properties: What lenders and insolvency practitioners need to know

When a company holding a leasehold interest in a JTC property ("Lessee") runs into financial distress, the usual enforcement playbook employed by mortgagees or chargees, receivers appointed by mortgagees or chargees or liquidators is not always straightforward. JTC leases contain assignment prohibition period (“APP”) during which the Lessee is generally prohibited from selling the JTC property to a third party buyer. This has presented difficulty in enforced sales by mortgagees or chargees, receivers or liquidators.

JTC’s recent circular of 8 January 2026 ("Circular") provides welcome clarification to lenders, insolvency practitioners and purchasers in distressed assets on how JTC will approach sales by mortgagees or chargees, receivers or liquidators during the APP.  The Circular forms part of JTC’s broader effort to improve regulatory efficiency and policy transparency.

What has changed; and what has not

The Circular confirms that JTC will consider assignment applications by: (a) mortgagees/chargees which have obtained JTC's prior written consent for the creation or transfer of the mortgage/charge (or where such consent is waived under JTC's Practice Circular dated 8 September 2008 – Notice of Mortgage/Charge in favour of Financial Institutions); or (b) liquidators, and be prepared to grant in principle consent for the assignment of JTC leases in respect of the JTC property within the APP, assessed against JTC’s prevailing policies as at the date of application which includes JTC's assessment of the proposed buyer's business plans.

The Circular further clarifies that unless the JTC lease expressly provides for an upfront payment for assignment of the JTC lease, JTC will not require the payment of any amount for waiver of the APP.  This reduces one key area of uncertainty: the risk of an unanticipated waiver premium affecting the economics of a distressed sale.

With that said, several fundamentals remain unchanged:

• JTC’s prior written consent is still required for the proposed assignment of the JTC lease in respect of the JTC property to the proposed buyer.
• The proposed buyer must still satisfy JTC’s policy criteria and business use requirements. Where change of use of the JTC property is required, the proposed buyer is still required to obtain approvals from the relevant authorities and JTC.
• JTC's in principle consent will still be subject to terms and conditions as JTC may determine, which may include the payment of applicable fees which are not related to the aforesaid waiver premium.

Implications for lenders and insolvency practitioners

From a secured lender’s perspective, a mortgage over a JTC property is intended to provide a clear security and a path to recovery in the event of a borrower default under the mortgage. This prospect of recovery helps the lender manage its risk exposure in extending loan facilities to the borrower.

To the extent that lenders may face difficulty in selling the JTC property where the borrower defaults within the APP, lenders may be hesitant to incur the upfront costs of enforcement and appointing receivers when any sale is prima facie prohibited due to the APP.

The Circular therefore bolsters lenders' confidence in the likelihood of the sale being approved by JTC within the APP. Lenders are incentivised to commence enforcement action, knowing that there is reasonable prospect of recovery if a potential buyer for the JTC property can be found and JTC will in principle consider an assignment application to sell the JTC property to such buyer within the APP without imposing an unanticipated waiver premium.

Insolvency practitioners such as liquidators and receivers also benefit from greater procedural clarity on how JTC's approval for the sale can be obtained, and the terms and conditions attached to such approval.

A more predictable but still policy-driven framework

For market participants, the key takeaway is not that restrictions have been removed, but that the contours of mortgagee or liquidator enforcement during the APP are now clarified.

Our corporate real estate and restructuring and insolvency lawyers are experienced in helping clients navigate enforcement actions against JTC property. If you would like to discuss how these developments may affect your financing, enforcement strategy or proposed acquisition of JTC property, please reach out to Lee Chau Hwei, Lam Zhen Yu or Cheryl Lee.