Paul Newby reminds pub companies what is expected of them in relation to the operation of the Pubs Code.
Since the Pubs Code came into force on 21 July, the office of the Pubs Code Adjudicator (PCA) has received numerous enquiries, complaints and requests for information from tenants. It has also received its first referrals for arbitration.
The Pubs Code Adjudicator is reminding pub companies that they should not act to shorten the time tenants have to enforce their rights under the code and all relevant information, required by the Pubs Code, relating to rent assessments or proposals for tenancies must be made available. This includes information related to a new tenancy and where there is an offer of a market rent only (MRO) agreement. In addition, pub companies must give reasons if refusing or disputing a notice service or a request for information made by the tied tenant.
Profit and loss statements provided alongside rent proposals or rent assessment proposals must be sufficiently clear and detailed. They should also include justification or supporting evidence for any assumptions made, so that the tenant can understand how estimated figures have been calculated.
The obligation is also on pub-owning businesses to ensure that the terms on which MRO tenancies are offered comply fully with the Pubs Code and contain no unreasonable terms and conditions for the tied tenant.
The pub industry should be aware of my expectations as the Pubs Code Adjudicator. I expect pub-owning businesses to act in a manner that does not inhibit a tied tenant from accessing their rights under the Pubs Code, providing all relevant information quickly and clearly.
Open communication is vital to help settle disputes and improve relationships across the industry. In all cases, the principle of fair and lawful dealing requires a pub-owning business to explain its position, so a tied tenant can know the nature of the dispute.
A statutory consultation on the operation of the PCA’s investigation and enforcement powers is open until 30 September 2016.