Licensee fears over pubco rent deposits

Pubco licensees have raised concerns about the security of their rent deposits - which run into the thousands of pounds - if their landlords were to go into administration.

Lessees from the UK's two largest pubcos - Enterprise Inns and Punch Taverns - have contacted The Publican​ desperate to know where they stand if the companies collapsed.

Martin Hand, lessee at the Enterprise-owned Queens Head, in Longford, Gloucester, said he was extremely worried about his landlord's position, due to its share price.

"My deposit is about £13,000, but they cannot guarantee to me that money is ring-fenced," he said.

Hand claims he was unable to get an answer from the company and has written to Enterprise seeking reassurance.

Enterprise refused to comment on the issue.

It came as the Solihull-based company today announced an eight per cent fall in net income per pub in the first 16 weeks of the financial year. The company's pub beer sales are also down six per cent year-on-year.

However the company claimed its balance sheet and cashflows remained "robust" - and its share price is today currently recovering well, having risen 22 per cent to nearly 39p.

Meanwhile Punch lessee Adrian Straatman, of the Old Tiger's Head, in Lee, South East London, said he was "very concerned" about the company's performance.

His three-month rent deposit is around £9,000. "That's a lot of money to me," he said.

"My rent agreement says it's my money and my solicitor says it's my money.

"But with their share price so low, we are very worried."

However a spokeswoman for Punch Taverns said the licensee had "already been assured that Punch Taverns is not going into administration" and the company was providing a written response.

"Our operational performance remains robust, delivering strong cashflows and substantial profits," the spokeswoman added.

Neil Lyon, a partner at specialist leisure solicitors Kimbells, said most pub leases were "silent" on the issue. However he added: "If a company was to go into administration, the administrator would look to assign the property to a new owner.

"A new landlord taking a pub on will normally only accept it if the property comes with the benefit of a rent deposit."