Why take a short Commercial Pub Co Lease with all the legal entailments?

By | September 1, 2018


Why take a short Commercial Pub Co Lease with all the legal entailments?

It’s a funny old world, the major Pub Co’s are now offering five year leases as the answer to the would be lessee’s needs.

It does of cause screw up any security that longer leases had within the current commercial leasing world, but never mind, the Pub Co’s must be assuming that the whole industry is suffering from amnesia or incapable of finding a commercial lawyer with the nous to point out the benefits, if any.

Originally they offered long leases, which were renewable, with a golden opportunity to increase the lease value to sell on to an aspiring would be lessee, then walk away with a substantial capital gain, a few did a lot didn’t, many with a nasty taste in their mouths, from the people that we met.

Never mind, that’s business, not your business we hope.

If you look on the Independent Family Brewers web site, comparing a tenancy with a five year lease, time wise some are the same or slightly less, they are in business to sell their products, not to make money out of dilapidations and other small print issues that are locked into a Commercial Lease, that many advisors have very limited knowledge of.

Two very expensive differences with a Tenancy, with a Commercial Lease you are not responsible for the maintenance of the building structure, with a genuine Tenancy your responsibilities on the property side relate to internal painting, dilapidations should not come into the equation, there is no Authorised Guarantee Agreement, as with a Commercial Lease, but read the small print some companies have adopted some of the Pub Co ideas.

What is the logic, there is no logic in taking a Commercial Pub Co five year lease in the foreseeable future unless they comply with the New Legislation, which they do not want to do.

Use this link to get further information on a Tenancy, this is not a commercial for Tenancies, it is common sense whilst the major Pub Co’s are trying to beat the New Legislation, which may take years, unless they come to their senses:- (https://www.morningadvertiser.co.uk/Article/2009/12/04/Family-brewers-tenancies-with-a-difference)

Potboy (South)

Always remember buying a pub is like marriage, “Marry in haste and repent at Leisure”.
Click on the articles below for further thoughts.

Pub Co’s, Pub Code Adjudicator (PCA), New Legislation and Reasonableness, “Barrel-Dregs” 

Pub Co Tied Leases, Questions that you need to Ask and Answers that you need to know before you start spending money. (Part 1)

Would you buy a Pub Co Tied Lease? Not Likely, Read On. (Barrel Dregs)

Why you should not take a major Pub Co Tied Lease, at this moment of time?

The views expressed are not necessarily the editors and www.buyingapub.com accepts no responsibility for them, we do try to avoid offensive or litigious statements being made. They are written by concerned professionals in the industry who feel that these issues should be raised to ensure that all licensees are made fully aware of many hidden pitfalls.

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