The new Pubs Code - which gives tenants across the UK more rights and greater protection when dealing with large pub companies that owns tied pubs – has now been implemented. And sector specialists at Bruton Knowles believe the code will give tenants greater freedom to operate in what remains a highly competitive market.
Steven Tasker, an Associate at the firm’s Manchester office, said the code – which was rolled out earlier in the summer - applies to the tenancies of all Pub companies owning 500 or more tied pubs in England and Wales.
He said: “Tied tenants are obliged to buy beer and other drinks from their landlords. As part of this new government legislation tenants now have the right to request a completely free of tie rent proposal known as a Market Rent Only option (MRO) and become a free of tie pub - free to purchase their beer and all products from wherever they like.
“The code gives around 12,000 tenants new rights and protections such as increased transparency about the tied deals available, a fair rent assessment and the right to move to a free-of-tie tenancy in certain circumstances.”
Steve said there are a number of 'triggers' that will allow the request of a MRO, such as at a rent review, lease renewal, or if publicans can demonstrate a substantial change in circumstances such as a significant increase in price in a tied product or service or where an event has occurred that significantly impacts on trade. But he added: “Whilst the code may be clear, any free-of-tie rent proposal is essentially a negotiation which can require careful handling.” It is also important to remember that the MRO notice must be received by the pub owning business within 21 days of the ‘trigger’ event.
Bruton Knowles advise and represent publicans throughout the process - from requesting a MRO offer to negotiating the rental offer to a fair conclusion. Importantly, Bruton Knowles, unlike other firms do not have a professional conflict of interest, in this respect.