The Pub Code Adjudicator (PCA)
and Tied Pub Co Leases/Tenancies,
It’s a funny old world, after four Government Inquiries into Pub Co Activity, the Government brought in New Legislation to stop the questionable Major Pub Co’s activities, all technically legal, but morally unacceptable to decent people.
They appointed a highly qualified Pub Code Adjudicator, whose main clients were, at least one of the Major Pub Co’s, who had featured in the Inquiries as one of the main attractions.
Needless to say, his appointment raised a considerable number of complaints from the people who had brought about the need for the Government Inquiries and New Legislation, which were ignored by the Government to get the Legislation through and working.
It would appear that he was retaining a substantial share holding in his previous organisation, one of the larger Commercial Agents.
He was alleged to be squeaky clean, a qualified professional, senior member of the RICS and would do whatever was needed to stop all these questionable legal activities that had caused the massive demise of decent people taking Pub Co Tied Leases and sadly still continues.
To be fair being the PCA was definitely a Poisoned Chalice and having previously had Major Pub Co’s as main clients, where at his exalted level he would never have seen the legally devious activities by his main clients.
To be fair the Major Pub Co’s who came under the New Legislation could afford to spend shed loads of money using the Top Legal Brains to find ways round the New Legislation, which was totally predictable.
The PCA was ill equipped to match the legally devious ploys that were used and still being used, he could not throw vast amounts of Government money and time at what was possibly a small legal issue, but vital to the interests of unsuspecting Lessees.
The key factor in the New Legislation was the Market Rent Option (MRO), which was supposed, simplistically, to allow any Pub Co Lessee the right to go Free of Tie at the current Market Rent of the individual premises.
The PCA’s former clients could not let this happen, it would make Leased Pubs profitable, the enormous discounts being extracted from brewers by the Major Pub Co’s and not factored into the divisible split of profits with the Lessee, would cause glorious “Mayhem”.
However the PCA struggled to right some wrongs, but the main issues were blocked or avoided for a number of reasons.
The only issue that would have any success would be, if nobody wanted any form of Major Pub Co Lease, they would then, hopefully comply with the New Legislation, even in it’s much battered state.
The majority of old Commercial Leases vanished to be replaced by new short term leases with little or no Tenant security, the situation remains the same with different Pub Co Rules.
A Colleague studied the PCA Brief and it would appear that the PCA is supposed to supply full information for all of the Pub Co Lessees, advising and ensuring on all aspects of the Lessees/Tenants responsibilities and implications, before considering or signing a Pub Co tied Lease. LINK
Sadly every failed and existing tenant that contacted our Colleague, none had been briefed or advised before signing a Major Pub Co Lease by the PCA, they were all in trouble to a greater or lesser degree.
Conversely every legal issue that appeared to cause any concern to the Major Pub Co’s, the PCA immediately advised the Pub Co under the legal term reasonableness.
Surely he should therefore ensure before anyone seriously starts looking for a Pub Co Tied Lease of all their long term and short term responsibilities, in detail.
As a former senior member of one of the largest Commercial Agents, it would be a simple matter if all Commercial Agents advised their potential purchasers to contact the PCA for full information on all their responsibilities in taking a Pub Co Tied Lease.
The PCA would then have to provide full chapter and verse on all aspects of taking a Pub Co Tied Lease/Tenancy, if the PCA failed to do this a failing Lessee/Tenant may have some legal redress.
My Colleague had a lengthy meeting with a Representative of the PCA, who appeared to have limited knowledge of the lengths that the Major Pub Co’s would go to, to retain the status quo and avoid complying with the New Legislation, the Legislation is now rumoured to be nearly dead in the water.
The PCA Representative left the PCA very shortly after the meeting with my Colleague, he phoned to follow up on several issues, the PCA said that they were not at liberty to discuss on going situations and put the phone down, which does not inspire confidence for anyone considering a Pub Co Tied Lease.
Our advice is to not take a Pub Co Tied Lease for the foreseeable future, until the New Legislation is complied with in all respects by the Pub Co’s that it applies to LINK.
The latest information is that the whole thing has become completely unworkable in trying to implement the Pub Co Legislation in respect of lessees and Tied Leases, an apparent unresolvable impasse has been achieved, which if correct, which I am assured that it is, please don’t take a Pub Co Tied Lease.
By all means take a Tied Tenancy with a decent Family Brewer, even then read all the small print or pay for professional advice, some of the Family Brewers have picked up some of the possibly questionable habits used with the Pub Co Model.
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”.
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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