A Lease with a Sting in the Tail (Barrel Dregs)

By | February 2, 2018

Bad Beer For Export

A Lease with a Sting in the Tail (Barrel Dregs)

Please note, access to this site is totally free if you would like to subscribe (No Charge) on www.buyingapub.com, they are free to be read for your guidance and aimed to help you get through a time of considerable pressure and demand.

Barrel-Dregs has been run for many years, we change all the identifiable details, but give you an insight as to many of the sharp or bad practices by a number of companies, in most cases they are just legal but morally unacceptable.

We have a number of Pub owning companies that we will not recommend, their actions have featured in Barrel-Dregs too many times, we did hope that by highlighting their antics they might change, but in Barrel-Dregs terms “Leopards do not change their spots, they cover them with more Mud.”

I called on a Licensee friend today and he asked for my advice.

One of his customers who had taken a new Pub Lease in 1993, made a success of the pub, sold it on some years later and had retired to a life of leisure.

The pub was sold on several times more and the last lessee went bust in January this year.

To his horror he received a demand for tens of thousands of pounds for the lost rent and the lessees debts from the present Pub Co owning the pub, who shall remain nameless.

He had not realised tha the lease in 1993 had a clause with Privity of Contract in it. Privity of Contract was banned in 1996 from all future leases and replaced in due course by the Pub Co’s with the Guarantee Agreement, but was legally enforceable on old leases.

Privity of Contract states that the original leaseholder can be held accountable for all debts covered by the lease for all subsequent lease holders until the expiration of the lease term, on a twenty year lease this can prove expensive.

The Guarantee Agreement makes the lessee responsible for the person that he assigns the lease to, which is marginally better.

One of the local licensing officers told me that one Pub Co was trying to evict a lessee who had assigned his lease and take possession of his bungalow to cover their losses after the new lessee that he had assigned the pub to, had been bankrupted.

It’s a very nasty Sting in the Tail years after you have left a successful leased pub.


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