News story

Stonegate is cooperating with the PCA in respect of historic Pubs Code breaches relating to the provision of Rent Proposals for new tied agreements

The PCA is gathering and assessing information after Stonegate identified historic breaches of the Pubs Code in relation to the provision of Rent Proposals for new tied agreements.

The Issue

The Pubs Code requires the pub company to provide the tenant with a Rent Proposal where it proposes a new agreement - regulation 15(7). It should do this before the tenant considers independent professional advice, such as business, legal, property and rental valuation advice - regulation 17(f). The tenant must take this advice before they prepare their business plan - regulation 10(2)(a). The Rent Proposal provides tenants with valuable information to understand how the rent has been calculated.

The PCA is reviewing information from Stonegate to understand legacy processes for providing rental information on new agreements since the start of the Code. This is in relation to historic compliance issues, including Code breaches identified in its Annual Compliance Report for 2020/21 that it had provided the Rent Proposal after the tenant had produced their initial business plan. Stonegate said the process was intended to ensure the tenant formed their own independent initial view of the business and was not influenced by Stonegate’s rent proposal data. It adds that the tenant was then invited to revisit any advice and/or their business plan in light of receiving Stonegate’s rent proposal. This is contrary to the Code as the Rent Proposal must be provided to the tenant before they consider independent professional advice, which in turn must be taken before the tenant prepares their business plan.

Stonegate said that it had rectified this in the 2021/22 reporting period to ensure the Rent Proposal was provided before the tenant submits their business plan.

Stonegate continues to cooperate with the PCA in this matter, including to identify how many tenants have been affected by non-compliance, and any detriment caused. Further information will be published as appropriate.

Affected Tenants

More information about a pub company’s duties in relation to Rent Proposals can be found in the PCA’s Factsheet.

Tenants who have any concerns about these issues can contact Stonegate’s Code Compliance Officer, James Richards at pubscode@stonegategroup.co.uk.

Anyone who has information which may be relevant to the PCA’s consideration of this matter can email office@pubscodeadjudicator.gov.uk.

Published 15 December 2022