Pub Ties

Proposals for regulating the relationship between pub companies and their tenants.

A feature of the recent recession is the number of closed and boarded up public houses which have found it impossible to continue in the economic climate. The premises that are closed include not only the smaller corner pubs but also larger premises which have previously been successful and thriving businesses.

For some time, there have been concerns in the trade about the unfair treatment of pub tenants by pub companies. The Government has finally acknowledged that self-regulation by the pub trade is not doing enough to improve the position of pub tenants. In April 2013, the government published a consultation paper seeking proposals for regulating the relationship between pub companies and their tenants. The consultation seeks views on proposals for ensuring that pub tenants are treated fairly and that Tenants subject to a beer tie should be no worse off than a tenant without such a tie.

A formal statutory code for companies with more than 500 public houses has been proposed to regulate the relationship with all their pub tenants, both those that are subject to the beer tie and those that are not. The code would be enforced by an adjudicator to exercise the function of an arbitrator for the purposes of setting an open market rent for premises and ensuring that the rent is calculated fairly. The adjudicator would also investigate where there are reasonable grounds for suspecting that a pub company is in breach of the code.

Fitzhugh Gates Solicitors Comment

The consultation closed on 14 June 2013 and it remains to be seen what formal procedures will be put in place to deal with what has been a longstanding problem in the licensing industry.

Frances Hovey - Property Solicitor.