'Upward only' rents ignored

Major pubcos say upward-only rent review (UORR) clauses still exist in some lease agreements - but they are ignored at rent review.

The issue resurfaced this week with news that an Enterprise pub where rent fell in arbitration still had an UORR clause (see p9).

Pub companies were urged to remove UORR clauses "as soon as is practicable" in the 2004 Trade & Industry Select Committee report into pubco power.

Greene King Pub Partners managing director David Elliott said changing individual agreements would be "a legal and timely cost" for the company and licensees.

"As we have made a conscious decision not to act on these clauses, we see no point in actively changing the remaining agreements.

"All new agreements do not include this clause so, as pubs change licensees, they go on to the new agreement. It would be difficult to be able to identify those that still have the clause written within them and also pointless as we are not imposing this with our licensees."

A Marston's Pub Company spokeswoman said if any agreements do still have the clause, the company would "treat it as one of the normal agreements, so if necessary the rent could be reduced".

A Punch Taverns spokeswoman said: "Our existing agreement does not contain an UORR provision. We continue to seek to convert all our old agreements to this approach.

"Irrespective of the agreement, we adopt a sensible and supportive approach to rent based upon the individual business circumstances. This arrangement works well - rarely has there been a call to go to arbitration."