25/08/2017

Pub owning businesses may be abiding by the letter of the Pub Code* that gives tied tenants the right to go ‘free of tie’ but Paul Newby, the code adjudicator, has found that, almost without exception, tenants believe they are failing to act within its spirit.

Concerns expressed by tenants and their representatives resulted in the adjudicator commissioning ‘Market Rent Only (MRO) Verification Exercise: Report on Evidence and Initial Analysis: August 2017’ to assess the issues that may be preventing tenants from accessing their rights.

Evidence produced by the exercise is being pursued with pub-owning businesses by the adjudicator – who has stated that he “stands ready to take further regulatory action, as necessary”.

Mr Newby has also published statements setting out his position on issues that have created delays in the arbitration process, increased tenants’ costs and “created a number of hurdles that, taken together, tenants consider to be insurmountable”.

These include

• the use of technicalities to reject MRO notices
• the form of agreement of MRO tenancies
• the requirement of new agreements for MRO tenancies
• challenges by pub owning businesses to market rent determinations made by independent assessors

‘Pubs Code Adjudicator Bulletin August 2017’  provides further details of the adjudicator’s response.

*The Pub Code gives tied tenants the right to go free of tie by requesting a market-rent only (MRO) option at

• tenancy renewal
• following receipt of a rent assessment proposal as part of a rent review
• where there has been a significant increase in the price of a tied product or service
• where an event occurs that has a significant impact on trade