ALMR opposes blanket ban on restrictive covenants

By John Harrinton, M&C Report

- Last updated on GMT

Related tags Restrictive covenants Contract law Restrictive covenant Public house

Restrictive covenants: consultation continues
Restrictive covenants: consultation continues
The Association of Licensed Multiple Retailers (ALMR) has urged action on the use of restrictive covenants on pub sales, but fell short of calling for a blanket ban.

The trade body wants the issue looked at on a case-by-case basis at a local level. The stance is in contrast to the Campaign for Real Ale (CAMRA), which supports a national ban on the measure, which forces change of use when pubs are sold.

The Government has been consulting on plans to ban sales of pubs with restrictive covenants.

The ALMR said it agrees with the Government’s conclusion that the effect of a covenant “be achieved through market forces or democratically-led through local authorities’ plans rather than be instigated through vested interests”.

Kate Nicholls, ALMR strategic affairs director, said: “Our concern is to ensure that there is a vital and vibrant property market for small businesses seeking to buy or lease pubs as going concerns. Inappropriate use of restrictive covenants can frustrate this as well as depriving local communities of valuable facilities and services.

“It also threatens to undermine the Government’s new ‘right to buy’ initiative and the listing of community assets under the Localism Bill.”

But the ALMR also said it agrees with the Government’s view that adverse effects from a restrictive covenant “will only be felt in certain circumstances”.

Nicholls added: “For this reason, we do not support the imposition of a blanket national or local ban on the use of restrictive covenants.”

The ALMR said that if restrictive covenants are to be retained, the Government should look at making them time limited and subject to review if there is a material change in the local market.

Last week CAMRA said a nationwide ban on the measure is “the only way to ensure that the practice of imposing restrictive covenants is permanently stopped”. CAMRA said giving authorities the right to implement local bans would lead to inconsistencies between different councils.

CAMRA’s consultation submission named 12 pub companies that have declined to rule out the use of restrictive covenants on pub sales. The number includes SA Brain, which is also an ALMR member company.

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