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Government Consultation regulation of the relationship between Pub Companies and Tenants announced

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On the 22 April, the Government launched its consultation on the statutory regulation of the relationship between large pub companies and their tenants.

The new regulations, when brought into force, are designed to cover pub companies who have more than 500 pubs. It appears that a pub company with an aggregate total of more than 500 pubs (i.e. managed, leased and tenanted) will be expected to apply the statutory code to their leased and tenanted pubs even if that number is fewer than 500. The Government invites a discussion on whether franchise arrangements should be covered or not.

The Government proposes a statutory code of practice which will cover issues such as the following :

  • Pre-contractual negotiations for those proposing to take a tenancy/lease
  • Rent assessments
  • Tie arrangement
  • The role of the Business Development Managers
  • How assignment of leases are dealt with
  • Insurance
  • Schedules of condition
  • Pub Company voluntary codes of practice
  • Compliance with the statutory code
  • Dispute resolution

The Government proposes that an adjudicator will be appointed who will have the power to:

  • Enforce the code
  • Investigate any breaches
  • Deal with disputes through any sanctions and fines

The consultation runs from the 22 April until 14 June and details can be found at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/191061/13-718-pub-companies-and-tenants-a-government-consultation.pdf

Should you require any further information you can contact Andrew Cochrane on 01332 226412 or 07720 414598.

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