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How to solve the CVA Crisis?

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Summary: Relationships between landlords and insolvency practitioners have taken a wrong turn recently over the CVA issue. Following recent news coverage and the “phoney-war” being waged in the media between landlords and tenants, we’re asking the real estate sector for its view on the recent CVA crisis, and for ideas on the short and long-term solutions. Your input into our survey will help as we aim to find an agreeable answer to the CVA question.

BCLP are looking to find an impartial solution to the ongoing CVA issue that does not unfairly penalise landlords or tenants. We would like your views on how we can solve the crisis. Please click on the below link to complete our two-minute survey on the causes and potential solutions.

Solving the CVA Crisis Survey

Please feel free to share this survey with colleagues and contacts within the sector. We are hoping the findings of the survey will help inform the best way forward, and the more opinions we have, the better! If you would like to learn more about our findings, please include your email address at the end of the survey.

Recent press coverage suggested that CVAs were being used as a tool to by distressed retailers to gain competitive advantages by reducing rents. High-street retailer Next has already waded into this by suggesting that it will now seek to insert clauses into its leases that, if any neighbouring unit obtains a reduction in rent by a CVA, Next’s rent will fall by the same amount.

Naturally, a number of landlords are affronted by this, and would argue they have been accommodating and willing to embrace changes to the marketplace. From shorter terms, to flexible spaces, to broader portfolios that can cater to different businesses at different parts of their business cycles, landlords are happy to be creative, when allowed to be so.

The retail sector looks to be at an impasse, with decades of recent progress in landlord and tenant relations at risk. As such, BCLP has developed a survey to try and get to root of the issue, and present solutions to the crisis.

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