Liberal Democrats come under fire over upward only rent review clause in council owned pub

By Gurjit Degun

- Last updated on GMT

Related tags: Renting, Lib dems

Phil Dixon: "The Lib Dems should practise what they preach"
Phil Dixon: "The Lib Dems should practise what they preach"
The Liberal Democrats have been urged to “practise what they preach” with regards to upward-only rent reviews (UORR) on leases.

The party has been the political driving force behind the statutory code, proposed by the Government to regulate the relationship between pub companies and tenants.

A consultation on the code was instigated by Lib Dem MPs Vince Cable, Secretary of State for Business, and Jo Swinson, employment minister.

However, the Publican’s Morning Advertiser has become aware of a pub in Bath, the Central Bar, which is owned by the Lib Dem-led Bath & North East Somerset Council, and has an upward-only rent review clause in its lease.

Such a clause has been prohibited under recent pub industry framework codes of practice, which are incorporated into pub companies’ own codes.
Version 6 of the code states: “UORR clauses will not be included in new leases or leases that are renewed at the expiry of an existing lease.

“Some existing agreements may contain UORR clauses and, in such circumstances, company codes of practice will make it clear they will
not enforce them.”

The Lib Dems have campaigned against such clauses since 2008 when Tim Farron MP tabled an early-day motion on the issue.

Mark Flynn, of the Central Bar, currently pays £55,000 rent to the council. He took on the venue in 2009, when the council was Conservative led.

He told the PMA a rent increase would make the business “untenable”. Flynn said his rent review is due in December but he has not heard from the
council whether the UORR will be implemented.

“[A higher rent] would make our business untenable because we are suffering from a lack of footfall and spending,” said Flynn. “We are on the borderline already.”

Lib Dem MP and chair of the All-Party Parliamentary Save the Pub Group Greg Mulholland said he will write to the council about the clause.

“I am hopeful the council will agree that an upward-only rent review is not appropriate,” he said.

Pub trade consultant Phil Dixon urged the Lib Dems to “practise what they preach”. He said: “There is no place in any lease agreement for upward-only rent reviews.

“A pub can only be let as a pub and the landlords are entitled to a fair rent, but not by using this onerous clause.

“Having met Greg Mulholland on a number of occasions I’m aware of his passion for pubs, so I’m delighted for the intervention.”

A spokesman for the council, which owns 25 pubs, said: “The council is not a pubco. The framework refers to tied or leased pubs, i.e. those with a brewery as landlord, and not commercial leases.

“The council’s policy is to agree commercial contracts for its premises on market terms whatever type of business approaches us
for negotiations.

“The comparison between a pubco and commercial estate provider is irrelevant. For example, there is no beer tie with a commercial estate provider that usually accompanies a rental agreement with the pubco.

“No pub-related business has complained to us about the market terms of its commercial lease.”

Related topics: Legislation

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