News Article Comments : Green light for BII rent adjudication system

RE: Green light for BII rent adjudication system

Phil - Robin Wright here.

The RICS are in the main an honourable organisation, however, few organisations are without their rotten apples. You will recall The Eagle Ale House rent review where a 12% rent reduction was finally achieved by the tenants who were self represented. The Arbitrator described the Chartered Surveyor acting for Enterprise Inns, who I should remind you was acting as an Independent Expert and was therefore bound by the RICS rules to act impartially and without bias, as "...adversarial and lacking objectivity". The same Arbitrator later admitted to an undisclosed conflict of interest with Enterprise Inns and was cautioned by the RICS accordingly.

In the above example only two highly experienced, specialist Chartered Surveyors were involved, the Arbitrator and the Enterprise Inns surveyor, both I think most would agree appear to have acted improperly.

So who is to choose your 'unbiased' surveyors ? - the President of the RICS did not do a particularly good job of that for the Eagle tenants. I suppose you might be considering a selection panel using senior executives of BII like Barry Gillham (Fleurets - who derive a considerable amount of work from guess who ?)

The principle of bettering the current system is indeed welcome, how you go about it is crucial. The same bought and paid for old 'industry experts' using the same unfair method of valuation will change nothing. Currently, tenants agree an inflated rent rather than suffer the costs of Arbitration. If the BII get it wrong they will end up at the same rent with a bill of £1,000 from you guys.

You will need to show a shake up for this to succeed, new faces, new methods. Your pubcos code of conduct 'endorsement' was laughable at the BESC given it is not approval of fairness but of clarity - what good is that ? The BII should be drafting the code of conduct and pubcos should be required to accept it or be shunned by the BII, thats working for your members.

This post replies to Phil Dixon > RE: Green light for BII rent adjudication system

Green light for BII rent adjudication system

Funny. No recollection of Rachman ever complaining about the method of rent valution, with or without RICS? Not sure if he ever went to arbitration....

This post replies to this thread

Green light for BII rent adjudication system

If the FMT is based on an average opperator then to find out if the current system is correct all we need to do is make a list of the assumed turnovers and opperating costs, all these will be known by the respective pubcos. Then compile a list of actual turnovers and costs. Getting this info would be more difficult admittedly.

The resultant pairs of profits for each pub could then be compared. As we are basing the FMT on an AVERAGE opperator about 50% of the pubs would be performing equal or below the FMT and about 50% would be performing equal or above the FMT. I would imagine the results, if the system is correct, should form a bell shape curve but its a long time since i did a level stats.

This post replies to this thread

RE: Green light for BII rent adjudication system

Hi Robin and user 4010

Points on Eagle noted you are aware I wrote an article on the subject. Let’s just be a bit careful here, the tenants were indeed self-represented but one of the guys Simon Clarke is a Chartered Surveyor! It would be wrong to suggest that licensees should venture into Arbitration or Independent Expert without some serious advice.

A fact you may be unaware of was that it was only a clause in the BII accredited Enterprise Code that allowed the rent to go down. Legally Simon and his partner Dave had the standard upwards only rent review wording in their agreement. For the record and let’s give credit where it is due, Enterprise have never to my knowledge enforced upwards only. A clear statement on this appeared in their first ever code back in 1996.

We did discuss at the BII a generic code when we decided to offer accreditation but felt this would stifle innovation and competitiveness. The Batemans Code is an example, Stuart at his eclectic best. No codes have been accepted without a number of requested amendments, we do issue guidelines but the key issue is clarity. Is there a tie what are you tied for?

BII does not have policy in the areas 4010 you are raising. Again personally I recall TISC saying there should be a clear difference between free and tied agreements it’s the ‘no worse off’ bit I find difficult. Happy to discuss this further my email address appears next to all my publications.

The next stage for the BII is to talk to other organisations such as ALMR and FLVA. To draw up a list of independent valuers will be a challenge (I may or may not be involved in this). If though we can put an end Martin to your rightful assertion ‘that tenants agree an inflated rent rather than suffer the costs of Arbitration’ then this proposal has to be a change for the better. Justice can be affordable.

Phil

This post replies to Forum user 4010 > RE: Green light for BII rent adjudication system

RE: Green light for BII rent adjudication system

Further to that, pubcos are used to dealing with an entirely one sided rent review process i.e. in effect it ALWAYS goes their way. The fact that there are, out of thousands of reviews which have taken place, a few isolated cases where rent has either stayed the same or gone down, does not let pubcos off the hook for the damage they have done to the trade by systematically incrementally over renting their estates. Just look around the evidence of pubs failing is everywhere.

Simply a few people, like Dave Law and Simon Clarke, have managed to fight their corner properly and vaguely win (they had very strong grounds that the rent should have gone down even further) because they were acting tooth and nail for their own survival and because of Simon's professional knowledge as a surveyor they eventually won through.

Pubcos should have been operating their 'model' responsibly with a sustainable business plan in place. They have not and they deserve everything they reap as reward.

This post replies to J Mark Dodds > RE: Green light for BII rent adjudication system