'Hold pubcos to what they say on codes'
Licensees have been urged to read their pubco codes of practice and "hold pubcos to what they say" — that's the view of Nigel Ball, senior director at BNP Paribas.
Speaking at the Publican's Morning Advertiser's MA Top 250 Independent Multiple Retailers Conference, Ball used Enterprise Inns' code of practice as an example.
"They say that they will 'discuss in confidence any comparable letting and rent review evidence we might have' and this relates to the rent review process.
"It's quite a bold offer of transparency. You should take them up on that. No rent should be agreed without full disclosure from your landlord of all comparable properties in the area. I can assure you, with 7,000 pubs, Enterprise will have some comparables in your area."
He slated the Royal Institution of Chartered Surveyors' rent guidelines. "Its major defect is that it was driven by pressure to reform the valuation approach taken by the pubcos on tied leases, yet it actually aims to cover all ownership models. I'm afraid it has failed," he said.
Instead, he encouraged tenants to use the Government-endorsed Code for Leasing Business Premises in England and Wales 2007 as better guidance. The full document is available here.
Top tips from the Code for Leasing Business Premises
• Think of any guarantee as if it will be called on the first day of the lease; what would the personal consequences be?
• Request written responses from the landlord, where you expect you need to rely on them
• Try to make sure you are not required to sublet at the same or higher rent than you pay
• Check that you understand the basis on which the rent can be changed.
For more on the MA Top 250 Independent Multiple Retailers Conference read next week's issue (28 July).
