Licensees warned to check leases to obtain rent reduction
Tom Henry, partner at law firm Weightmans, was speaking at the annual Guild of Master Victuallers conference in Ramsgate, Kent, last week.
He explained that he is very concerned about “the conduct of some of the landlords”, and that they may keep licensees on an existing contract to continue charging a higher rent.
Henry advised licensees who think they are due for a lease renewal to contact a licensed trade surveyor for advice on whether their rent should be lower.
He said that if licensees are completely sure that their rent should be lower, then they should serve their pub company a section 26 notice under the Landlord & Tenant Act 1954.
“Most of you are protected by the Landlord & Tenant Act 1954,” Henry told delegates. “You have basic rights to a renewal of your lease when it expires on terms similar to your existing lease, apart from the rent, which is to do with market forces. When your lease expires, you are still protected unless your landlord has served you with a termination notice, which has to be at least six months.
“If the landlord forgets, the lease carries on under the same terms and rent until the landlord serves a notice.
“The issue that has arisen over the past few years is the economic situation, and rents are still very high. On rent renewals, we look at open-market forces and your rent could come down. The problem is that until the lease comes to an end you have to pay the same rent, so some landlords deliberately delay serving the notice.
“However, the tenant can serve a section 26 notice on the landlord saying, ‘I want to renew my lease, these are my terms and rent.’ The landlord has to respond to that. But you have to be careful — you need to be sure that your rent will go down so you will need to get expert advice from a surveyor. Only then should you serve a section 26 notice.”
Henry added that if the landlord does not agree to the terms and rent set by the tenant, the tenant could take the case to court, however, that would cost a lot of money. Another route, Henry said, is through the Pubs Independent Rent Review Scheme.
