Pubcos denied right to elect use of PIRRS

12-Feb-2015 - Last updated on 12-Feb-2015 at 08:43 GMT

Related tags Rent review scheme Landlord Renting

PIRRS was set up with the aim of offering a speedy and low-cost alternative to formal arbitration for tenants and landlords

The Pub Governing Body (PGB) that oversees PIRRS — the rent resolution service for pub tenants — rejected a request from pubcos to allow them to automatically elect to use the scheme for fear it would undermine its credibility.

The decision was revealed in the annual report of the Pubs Independent Rent Review Scheme, covering the period September 2012 to March 2014.

The PGB said it considered a request made by landlord companies to allow them to choose PIRRS for rent reviews where the tenant had not yet elected to
refer the matter to an available form of third-party determination.

However, the request was vetoed because the PGB said the scheme’s credibility was dependent on the ability of tenants to have the choice of which route to take.

“The board was particularly concerned that to allow landlord companies the right to request the dispute be referred to PIRRS could see tenants forced into an action that they do not necessarily agree with,” the report stated.

Recommendations

PIRRS was set up in 2009 with the aim of offering a speedy and low-cost alternative to formal arbitration for tenants and landlords.

The report also outlines recommendations that aim to increase the transparency of the scheme. The name and location of the outlet concerned, the pre-existing
(passing) rent and the new rent as determined by the independent valuer will be publicised online if agreed by the applicant.

A reasoned determination can now be requested by either party, with pubcos not permitted to refuse to allow tenants one, and neither party can hide the findings.
The PGB also confirmed that PIRRS can be used for free-of-tie premises where the landlord company in question is a subscribing member to the scheme.

PIRRS dealt with 30 cases during the period; 12 were completed; 10 were mutually resolved without progressing beyond application and withdrawn; one was closed due to tenant inactivity; and 18 cases are ongoing at the end of the reporting period.

Transparency

PGB chairman Peter Luff MP said the scheme represented a cost-effective and rapid alternative to formal arbitration.

“The review scheme takes, on average, 20 to 30 weeks and costs no more than £2,000, representing a significant saving in time and money for tenants in need of assistance. We continue to look for ways to improve the transparency of the scheme,” he said.

“Given the changing landscape of the sector, tenants may be unsure where to turn to. Our message to operators is that this scheme exists to provide prompt assistance and really can contribute to the productiveness of the whole sector.”

The future of PIRRS is uncertain, pending the introduction of the Statutory Pubs Code.

Download the report