According to the British Retail Consortium (BRC), landlords which have been forced to lower rent due to retailers using insolvency procedures such as CVAs, are ‘’usually charging too much based on out of date values’’.
This comes in response to a claim from Melanie Leech, the British Property Federation CEO, that retailers are abusing company voluntary arrangements (CVAs) which can lead to rent cuts as a means of rescue in times of insolvency.
Despite this, the BRC said that CVA rent cuts were ‘’usually simply bringing payments up to date with market values’’. They explain that retailers do not enter CVAs lightly. ‘’CVAs are one of very few ways a company in distress can restructure to keep trading’’, says BRC property policy advisor, Dominic Curran.