Specialising in advising pub tenants on Market Rent Only and Tied Lease options
Due to the complex nature of this type of business, we have created a unique team of industry specialists who have unrivaled experience in issues relating to tenancies, property, and the often complex landlord/tenant relationship.
This experience allows us to not only understand and foresee issues but to explain them to you in clear, jargon-free language and to ensure that you are able to take decisive, positive action. We understand the challenges which are involved in running a successful pub, and we want to work with you to help you to achieve your goals.
Our lawyers and surveyors are here to give pub tenants the support they need to develop a thriving pub business, to give specific and practical answers to your questions, and to help you get things done.
We want to work together with you over the long-term, and we will make ourselves available to you so that you always have somewhere to come with all your questions, not matter how insignificant they might seem. Our philosophy is that, with something as complicated as running a successful pub, it is better to get every-day advice which will avoid a crisis, rather than waiting until crisis point before getting advice.
If you would like to talk to a highly experienced expert who can give you come clear guidance on the best way to help your business succeed, get in touch.
Is a Market Rent Only (“MRO”) lease right for you?
Pub owning businesses (“POBs”) are experts in using the complex rules relating to MROs to put pressure on their tenants, and they are not afraid to use these rules tactically in MRO negotiations. It is therefore vital that you have your own expert support if you are involved in these discussions, because time frames are tight and, very often, missing a deadline means you can no longer seek MRO. We are highly experienced at dealing with these kinds of contentious situations and are ready to go into battle to help protect your rights, but we will only do so if the circumstances require it. Legal confrontations are usually caused by the pressure of tight and strict deadlines, so, due to this, you should always contact us as soon as possible so we can give you immediate assistance.
Some examples of the tight time frames involved in MRO negotiations are:
- After one of the four trigger events occurs (see our FAQ: “What is a trigger event?”), a Tied Pub Tenant (“TPT”) has only 21 days to serve a trigger notice on the POB. You need to understand what constitutes a trigger event and then ensure that the proper paperwork is completed to serve your MRO notice within the 21-day limit.
- Once an MRO offer is received by a TPT, you have only 14 days to object to any of the proposed terms. The terms of the new lease contained in the MRO will almost always be worse than your current agreement, but you will need to act fast to understand the new terms and the impact they might have on your business.
- You have only 56 days to negotiate an MRO from the date of receipt, although it is possible for you to refer the case to an Independent Assessor if there has been no agreement reached on rent after 28 days.
We have a huge amount of experience working with these complicated rules and stringent deadlines, so you can rely on us to move quickly to ensure you are properly advised on the best approach to take through the complex legislation. Decisive action is required in most cases, and our experience and expertise will help you to take it.
It is our job to put you in the position to make the best decision, and we recognise that, in some circumstances, that may be to not seek an MRO. Our approach is based on providing the clearest, waffle and jargon free advice, and we will be very clear on the potential advantages and disadvantages of all your available options.
*See the glossary below for a definition of various terms used here.
The MRO process explained
1. The Pubs Code etc. Regulations 2016 (“the Pubs Code”)
The Pubs Code regulates the relationship between TPTs and their landlords (providing the POB owns 500 or more tied pubs in England and Wales), and tries to grant and protect the rights of TPTs in these necessarily unbalanced relationships.
The key principles of the Pubs Code are:
- POBs should treat their TPTs in a fair and lawful way; and
- TPTs should not be worse off than they would be if there was no tie.
The Pubs Code tries to ensure that TPTs understand what taking on a pub means; that they get all the information they need to make an informed decision about running a pub, including the terms and conditions of the lease; and that they receive a rent assessment at least every 5 years. In addition to this, the Pubs Code also requires that a TPT can request an MRO in certain circumstances (see our FAQ: “What is a trigger event?”), which removes the existing tie.
2. MRO trigger events
An MRO event is a trigger which enables a TPT to serve an MRO notice on the POB (see our FAQ: “What is a trigger event?”). A key question in these circumstances is whether the MRO should be arranged as a variation on the existing lease or as a brand-new tenancy agreement. The imposition of a new tenancy agreement can often be highly unfavourable to the TPT, as they may become liable for a range of different costs (such as legal fees and deposits) and, potentially, dilapidation claims.
The Pubs Code sets out a clear procedure for agreeing an MRO lease once a trigger event has occurred, including a strict timetable.
3. Lease renewals
The provisions of the Pubs Code have also had an impact on the process of renewing a pub lease under the Landlord and Tenant Act 1954. A TPT must now state on the claim form whether it has served an MRO notice and, if such a notice has been served, the court must consider whether to stay proceedings until the outcome of the MRO process is finalised. Guidance is also provided on the different process required if the claim is opposed or unopposed, and in relation to claims for interim rent from Pubs Code tenants.
4. The Pubs Code Adjudicator
Sometimes, the process of agreeing an MRO lease following a trigger event does not run smoothly. Partly because of this, the Pubs Code created the position of Pubs Code Adjudicator, an independent position with powers to make recommendations, require the publication of information and to impose financial penalties on parties which breach the Pubs Code. In particular, the Pubs Code Adjudicator gets involved to:
- Resolve disputes between POBs and TPTs.
- Adjudicate on breaches of the Pubs Code, and to award redress to TPTs if appropriate.
- Investigate suspected abuses of the Pubs Code
5. Referrals to the Adjudicator
Under the provisions of the Pubs Code, a TPT can make a referral to the Adjudicator if it believes that there has been a breach of the regulations. An example of such a breach could be if a POB’s response to an MRO notice is considered defective in some way. The Adjudicator can also be asked to rule on the terms of a free of tie tenancy if agreement cannot be reached between the parties. In these circumstances, the rent payable would be determined by an independent assessor.
It is hoped that decisions by the Adjudicator will start to create precedents which can be used to better understand how the Pubs Code should be applied to particular cases (for example, whether a deed of variation or a new tenancy should be used when an MRO lease is agreed). As yet, the specific nature of the individual cases which have been referred to the Adjudicator means that no general precedents have emerged from the rulings, but this system should develop as more adjudications are made.
We are proud of our Yorkshire values of straight forwardness, getting things done and, importantly, offering value for money. We offer a free, no obligation initial consultation, which enables us to understand your goals. Following this meeting, we will be able to provide you with a detailed assessment of your prospects and a bespoke fee proposal. We are often able to offer fixed fee arrangements for certain matters, as appropriate.
We are confident that we will find a pricing option which suits you and your circumstances. We can do everything bigger, national firms can do, but our flexibility and personal approach, plus our commitment to avoiding waffle and legal jargon, means that we can offer a better, more cost effective, service.
Get in touch today for your free, no obligation, initial consultation.