An Update – 30 January 2015
The Government spokesman in the House of Lords (Baroness Neville-Rolfe) announced on 28 January 2015 yet further changes in respect of the Small Business, Enterprise and Employment Bill and the Pubs Code. The Government now proposes to exclude from the Pub Code tenancies at will and temporary agreements that do not extend beyond a certain limited period. She did not commit herself to the period of time that she had in mind but referred to 6, 9 or 12 months. The Government is to consult more widely on the length of any exemption period before bringing forward regulations. On the face of it this means that tenancies at will, periodic tenancies which do not run for longer than the period of time that the Government decides for the exemption (6, 9 or 12 months) and, also, short term tenancies which expire within that period will all be excluded from the Pubs Code.
Accordingly the position stated in my earlier article has slightly changed and now is:
- Tenancies at will fall outside the Pubs Code and fall outside the Landlord and Tenant Act 1954.
- Periodic tenancies, depending on their length, may or may not fall within the Pubs Code but will fall inside the 1954 Act.
- Short fixed term tenancies, depending on their length, may or may not fall within the Pubs Code and may or may not fall inside the 1954 Act.
This is likely to be unsatisfactory, not only for the present uncertainty, but because you could have what would appear to be, at first glance, similar arrangements being treated in very different ways both under the new Pubs Code and also under the Landlord and Tenant Act 1954.
This could lead to some difficult situations. Consider these:
- A tenancy at will has arisen and, because of changed circumstances, becomes a periodic tenancy. Does the Pubs Code apply and would it make a difference as to how long the tenancy at will lasted before converting to a periodic tenancy?
- If a tenancy at will follows a tenancy that is protected by the Pubs Code does the Pubs Code continue to apply to it?
- Does it matter how long the tenancy at will continues?
The differences between a tenancy at will and a periodic tenancy are likely to be important and are explored in my original note.
The fact that this position has changed in just a week demonstrates that the Code is far from settled and operators should continue to follow the situation closely to keep on top of the possible implications for their businesses. We will continue to report on this changing situation as more clarity emerges.
