Landlord's Hypothec: the peculiar Scottish security right and its interaction with CVAs

CVAs remain the restructuring tool of choice for businesses with multi-let properties. Since the start of the first UK lockdown, there has been a marked increase in the number of CVAs in the hospitality and retail sectors. Whilst vaccines are now being dispensed, the economic ramifications of the pandemic will persist for some time to come and as a result we expect to see many more CVAs being proposed, particularly in these sectors. The introduction of R3's Standard Form COVID-19 CVA Proposal could lead to an increase in the use of CVAs in the SME market too. In Scotland, this means that we will continue to see tension and uncertainty arising from the interaction between CVAs and the peculiar Scottish right of security, known as Landlord's hypothec.