Take advice on your lease

A glance through the regular advertisements that appear for pub leases in particular will often throw up the phrase "enormous potential".

In stark terms this means that the pub in question has under-performed, the current or past licensee has probably gone bust and the only way to improve matters is to sink large sums of money into a complete revamp in the hope of luring more customers.

There is no doubt that, even in these harsh economic times, there have been success stories. But my postbag paints a different picture. I probably get more than my fair share of desperate pleas for help, especially late in the day when everything has gone wrong. Often the stories I read suggest that the promises and expectations of a successful business were way out of kilter.

My colleague and friend Phil Dixon has been helping licensees all over the country for many years, but even that redoubtable champion of the licensee cannot turn a bad deal into a good one when the lease has been signed and the increased custom does not appear out of the blue.

We can both tell many tales of ill-prepared lessees who have listened to the plausible sales pitches and have made the mistake, which I often point out on these pages, of listening to the salesman for all the relevant information. So I am more than pleased that Ted Tuppen of Enterprise should be pushing for actual formal advice to be put in place before a lease is signed.

Anyone who puts their signature to such a document without having their own (paid) advisor really needs their head examined. Leases are written specifically for the benefit of the lessor, not the lessee (please do not send me outraged letters about honesty and integrity, because it is a fact of life). You let a property to make money out of it and its business (in the case of the licensed trade) and it is the marriage of these two factors, which do not necessarily apply to other property leases, that puts the pub lease in a special position.

Complex​

If I rent a shop to run a florist or a delicatessen, that is my business and not that of the owners. I do not have him setting the price of vases or croissants and telling me what roses I can sell. I factor in only the rent and the upkeep and then work out if I can make the business pay.

But a pub lease is more complex, and only an expert can tell you if the lease terms have hidden dangers, are legally enforceable or will cause problems on assignment or reversion.

There are intelligent people in the pub business and several who know property law well. Unfortunately, those taking on a single pub for the first time, or those who have knowledge of the trade but have worked as an employee, are not necessarily equipped to take on the 'big boys' in terms of negotiation. It is all very well having advice lines and websites, but when it comes to the crunch there is nothing more important than someone you actually hire to help you, who has the knowledge you need and a proven track record.

Sorry if I sound like a broken record, but over the years the key factor for me is the depressing number of people who write to say how they wish they had taken advice at the start. They look back at the cost and recognise it would have been money well spent. Certainly better than the losses they have now built up. That's the pity.