Mixed fortunes for licensees seeking MRO

By Oli Gross contact

- Last updated on GMT

Retrospective MRO bids: differing outcomes
Retrospective MRO bids: differing outcomes

Related tags: Renting

Tenants with unresolved rent reviews from before the pubs code was implemented are having mixed fortunes in their attempts to take up the market rent-only option (MRO).

Licensees of the Millwright Arms, Warwick, requested a rent assessment under the terms of the pubs code despite their original, disputed rent assessment falling on 9 June – before the code’s implementation.

A spokesman for the pubco confirmed: “We will, of course, provide them with this in line with the timescales specified within the legislation.”

Licensees Trish and Gary Mason will now be provided with details of a free-of-tie option.

MRO requests bounced

But it hasn’t been straightforward for everyone, according to Si Clarke, of Morgan and Clarke Chartered Surveyors.

He told The Morning Advertiser​ dozens of tenants in similar positions have contacted their pubcos and asked for rent reviews under the terms of the code.

“In many cases, the pub-owning business has bounced straight back stating the tenant is not eligible for MRO or that rent assessment is not appropriate as the request is invalid, due to the timing,” Clarke explained.

“The tenant has not, at this stage, asked for MRO but just a rent assessment, which would be tied, so apparently the pub-owning businesses are highly defensive and perhaps confused about what is being sought.”

Provision for request

Under the code, rent assessment proposals must be provided when requested by a tenant where no rent assessment has been agreed in the past five years.

“Essentially this differs from a straightforward rent assessment request associated with a specific rent review. The tenant is not able to initiate the MRO process on the basis of the rent review, which is effective immediately before the code implementation.

"They are able to initiate a MRO process if their last agreed rent review were more than five years ago and their current rent review remains unconcluded,” Clarke explained.

Not retrospective

Former Small Business Minister Anna Soubry had confirmed the code would not be retrospective following the code’s delay.

“The code does, however, offer regulations to tied tenants whose rent review remains outstanding. In some circumstances they can request both a code compliant rent assessment and the option to consider MRO should their tied rent assessment proposal be unacceptable,” Clarke added.

Clarke is also secretary of the British Pub Confederation, which is available to advise tenants.

Publicans can also access the code regulations, and specific advice by contacting the pubs code adjudicator's office directly by visiting www.gov.uk/government/organisations/pubs-code-adjudicator​, or call 0800 528 8080.

Related topics: Legislation

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