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BC article - CVAs and commercial property 003.pdf

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🔗 Source: 3harecourt.com

📊 Size: 156 KB

👤 Author: Ben Channer

⬇️ Downloads: 122

Summary

Company Voluntary Arrangements (CVAs) have significant implications for landlords of commercial tenants. With many high street retailers struggling due to coronavirus restrictions and online shopping, CVAs have become a common route for compromise with landlords and other creditors. A CVA can reduce or alter rental payments, shorten lease terms, and prevent dilapidation claims. The Debenhams CVA case clarified that future rent can be included in a CVA, but any proposed reduction in rent can be challenged if it unfairly prejudices creditors. Landlords can be regarded as creditors, and contractual rent should be interfered with as little as possible. The court considers the overall picture, including market rent and the ability to terminate the lease, when determining fairness. A CVA cannot prevent a landlord's ability to forfeit a lease due to an insolvency event, but it can modify the pecuniary obligation that gives rise to the right of forfeiture. Ultimately, the decision for a landlord to accept a CVA is a commercial one, weighing the benefits of a lower rent against the risk of an empty premises and no rental income.

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Company Voluntary Arrangements (CVAs) have significant implications for landlords of commercial tenants.

Technical Information

File Format: PDF
File Size: 156 KB
Pages: 3
Language: EN
Author: Ben Channer
Total Downloads: 122
Last Updated: 17 hours ago

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