Pub Co’s, Pub Code Adjudicator (PCA), New Legislation and Reasonableness, “Barrel-Dregs”
A note from my learned colleague Potboy (Midlands), the foxy Pub Co’s would appear to have outwitted the poor old lamb, Pub Code Adjudicator (PCA), on would you believe, reasonableness.
I can’t even think of a time that a member of a Pub Co could spell reasonableness, let alone being reasonable, unless they were really being caught out after some questionable activity that a member of their staff had over stepped the letter of the law.
The new Legislation with the Market Rent Option (MRO), would appear to have hit the inevitable wall and could be dead in the water, all those BISC’s and New Legislation to give Tied hapless lessees a fair deal due to a word called reasonableness.
What seemed a very simple process, if you have an existing Tied Pub Co lease, you can apply for a Deed of Variation (DOV) to your lease in order to go Free of Tie at a fair Market Rent.
The debateable issue was the level of rent, the key word is Fair, fine, a great step forward.
The major Pub Co’s were fuming, they are now offering new five year leases, in some experts opinion, with some questionable clauses.
By taking a new five year lease, you lose all the rights enshrined in the 54 Act, which there are a number.
It would be far simpler to convert to a five year tenancy, the old Family Brewer principle, without the onerous responsibilities of full RPI Commercial Lease, “No Chance”.
The Pub Co’s, by offering five year Commercial Leases are claiming that they are being reasonable within the conditions of the new Legislation, but surely they cannot be reasonable if the long leases held by existing lessees lose a number of beneficial rights within the 54 Act and the ability to renew the lease.
The DOV route is available as confirmed in the PCA guidance issued in August and December 2017 and March this year, but it would appear that none of the Pub Co’s involved are offering a DOV on an existing lease, that to a former member of the RICS in pre history, does not sound like reasonableness.
However, it would appear that reasonableness is dependent on which side of the fence you are on, the poor old PCA could be faced with all the legal might of most, if not all the Major Pub Co’s on this issue of reasonableness, he is just a humble member of the RICS and not an outrageously expensive commercial lawyer.
With this sort of nonsense Potboy would suggest that anyone with an iota of common sense (reasonableness) would not touch a Pub Co Tied Lease with a borrowed barge pole from a Bargee on the Grand Union canal.
If the New Legislation is about to founder, it would appear to say little for the major Pub Co’s consideration for improving the viability of their Tied Lessees
Editors Note:-Latest Info. Oh my goodness, the legal eagles are hovering over the New Legislation, waiting to tear it to pieces, whether Potboy’s perceived view is still current in a few weeks time, we have no idea.
But the perceived wall would appear to have grown to match the Berlin Wall, which eventually came crashing down when one side pushed harder than the other.
Sadly these disputes are killing the industry, let’s have some serious reasonableness, from vastly overpaid Executives who have never run a Tied Pub Lease in their lives, compared to the net earnings of a Tied Lessee.
Click on this LINK for the questions that you need Answers to before you spend any money on considering a Pub Co Tied Lease.
Always remember buying a pub is like marriage, “Marry in haste and repent at Leisure”.
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