A year before the lease was up for renewal Punch issued a Section 25, which is the notice needed to terminate a lease agreement, and said it wanted to take the pub back to operate it under its own management. It also highlighted dilapidations as a reason to terminate the lease.
“From there it took almost a year of negotiation and determined legal wrangling before I finally received a free-of-tie lease for the Swan – and it didn’t come a moment too soon, as the following day Heineken’s takeover of Punch Taverns was completed, which would have left me and my staff high, dry and back to square one,” said Crossman.
'No future without free-of-tie'
“I am delighted to secure this. The pub did not have a future without being free-of-tie. The process was extremely draining emotionally and financially, and at times extremely stressful.
According to lawyers Lupton Fawcett, that acted for Crossman, pubcos often adopt various tactics including serving a Section 25 notice on landlords to oppose the grant of a new lease on the basis that they want to take the back the pub and operate it themselves
“The Pubs Code Regulations were passed with the intent of assisting pub tenants by giving them the freedom to operate their business untied from the company that owned their pub,” said Rob Cooke, director of Lupton Fawcett’s dispute management team.
“We hope this small victory will inspire other pub tenants to follow suit and aim for a lease agreement that not only proves beneficial to them, but provides their customers with far greater choice.”
A Punch spokeswoman said this was the fourth site to complete a new MRO agreement.
“Punch fully embraces the Pubs Code and is happy to be able to mutually agree another case without the need to utilise the assistance of the adjudicator. The negotiation period can vary from situation to situation; the important point is that parties are engaging and arriving at mutually agreeable solutions.
“The Pubs Code, through MRO, allows tied publicans the option to consider a free-of-tie alternative when deciding what is best for their business moving forward. In this instance, our publican felt this to be via a new free-of-tie MRO agreement. We recognise this right and wish Mr Crossman every success for the future.”
Pubs Code Adjudicator
A Pubs Code Adjudicator spokesperson said: "There are four types of event which entitle a tied pub tenant to request a Market Rent Only option from their pub-owning business, and one of these is in connection with the renewal of their tied agreement. This can occur where the tenant receives a section 25(1) notice from the pub-owning business under the Landlord and Tenant Act 1954 giving notice of the date of termination."