Q&As

A tenant has entered into a company voluntary arrangement (CVA) and is consequently paying 50% of the contractual rent under the CVA. At the same time they are negotiating a new commercial lease regulated by the Landlord and Tenant Act 1954. Will an application made to the court adversely affect the amount of rent the tenant is paying? Also the landlord is entitled to give nine months notice under the CVA to bring the lease to an end. Can they still do this after protective proceedings have been commenced by the tenant?

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Produced in partnership with Chris Bryden of 4 King’s Bench Walk
Published on LexisPSL on 30/08/2017

The following Property Q&A produced in partnership with Chris Bryden of 4 King’s Bench Walk provides comprehensive and up to date legal information covering:

  • A tenant has entered into a company voluntary arrangement (CVA) and is consequently paying 50% of the contractual rent under the CVA. At the same time they are negotiating a new commercial lease regulated by the Landlord and Tenant Act 1954. Will an application made to the court adversely affect the amount of rent the tenant is paying? Also the landlord is entitled to give nine months notice under the CVA to bring the lease to an end. Can they still do this after protective proceedings have been commenced by the tenant?

Where a tenant company enters into a company voluntary arrangement (CVA), there are a number of restrictions upon the ability of the landlord to obtain possession. This includes the prohibition of forfeiture by peaceable re-entry, save with the consent of the administrator or permission of the court. Permission is also required to forfeit by proceedings (section 130(2) of the Insolvency Act 1986). See Practice Note: Property law aspects of Company Voluntary Arrangements (CVAs) for further information.

A CVA does not result from a court order. Rather, it is a compromise entered into between the company and its credit

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