The long anticipated draft of the Regulations has now been published and we covered some of the important points to note in our previous article. However, there remain some fundamental questions which require to be answered and it is not obvious that the Code in its final form is going to provide satisfactory answers. The full list is lengthy, but includes the following:

1. What is a pub?

The Government thinks that we all ‘know a pub when we see one’. There may be an obvious difference between a pub and a fish and chip shop – although at least one chain of fish and chip restaurants could fall between the two stools. It further accepts that hotels and restaurants should not be captured by this.

For more discussion on the differences between a pub and a restaurant – and why it matters, click on the read more button below.

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2. What is a tied pub?

The Small Business, Enterprise & Employment (SBEE) Act 2015 has produced a very surprising definition of what a tie means. Oddly, the much maligned Beer Orders, despite including some odd provisions, contained a better attempt at describing a trade tie. Trade ties can take various forms, and both before the Beer Orders and in the aftermath of them taking effect, various mechanisms were developed and tried in order to achieve the same economic effect. It is not obvious that lessons have been learned from that era. If you would like to know more on this, click on the read more button below.

Click here to view from definition from the Act.

If you have any questions regarding the definition of a tied pub, please contact Peter Holden at:
peter.holden@freeths.co.uk

3. What is a service tie?

One of the most extraordinary features of the Regulations is that the only service tie that it would be reasonable for MRO tenants to accept relates to buildings insurance! Can this be right?  What if the pub owning business owns the whole block; what about a service charge? There is then the not insignificant issue of statutory compliance. One of the interesting facts to come out in recent years is that the number of FOT pubs closing has exceeded the number of tied pubs closing. If a pub owning business has to take an MRO free of tie pub back at short notice – and this has happened – isn’t it in everyone’s interest to ensure that gas certification, electrical certification etc has taken place?

Readers may recall a case in recent years in the Liverpool area where a tenant vacated and the pub owning business put a caretaker in to keep the premises secure and free from vandalism only for there to be gas leak with tragic consequences (reports at the time suggested that the gas installations had not been checked). Read more about the implications by clicking below.

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4. Landlord and Tenant Act renewals

One of the more difficult aspects of drafting the Regulations was how to tie them in with the statutory procedure for renewals under the 1954 Act, which has contributed to their enormous complexity. A particular difficulty lies in the fact that it is difficult to treat the tie in isolation. Normally, a tied house will have different provisions for repairs, redecorating, branding, signage, equipment servicing and other support services. The intention appears to be that the MRO tenant’s right is to have the tie removed but, seemingly, everything else remains as it was.  Even the Beer Orders recognised that ties could not be viewed in isolation and were linked to issues such as repairs.

If you  any specific queries relating to Landlord and Tenant Act renewals, please contact Peter Holden at:
peter.holden@freeths.co.uk


The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.