Many tied tenants unclear about pubs code rights, PCA survey finds

By Claire Churchard contact

- Last updated on GMT

Greater clarity: survey of tied tenants reveals need for more user-friendly information
Greater clarity: survey of tied tenants reveals need for more user-friendly information

Related tags: Pubs code, Landlord, Renting, Leasehold estate, Pca

A survey of tied tenants has revealed that the rights they are entitled to under the pubs code remain a mystery for a significant proportion.

The survey, involving 388 tied pub tenants and published by the pubs code adjudicator (PCA), found that while 72% of tenants surveyed knew about the pubs code, a smaller proportion understood the details of their rights.

Less than two-thirds, 63%, knew that the code entitles tenants to a rent review every five years, while just 36% knew they have a right to request a market-rent-only (MRO) agreement to potentially go free of tie.

Only 47% felt very informed about the responsibility of their pub company representative to provide them with notes of discussions about rent, repairs and their business plans. And just over half, 53%, of tenants knew about the PCA.

MRO questions

Since the introduction of the pubs code, a lower than expected number of MRO requests from tenants have raised questions about how well the code is working.

The survey found that tenants who had experienced an MRO trigger event, meaning they can request an MRO, but who had decided not to pursue it said it was because of concerns about the costs, the belief that only a few tenants had been successful or that pub owning businesses would delay or block the process.

Respondents also said they hadn’t pursued MRO because of concerns they would be labelled troublemakers or that they would miss the deadlines that are part of the process.

'Not a genuine choice' 

More than half the tenants who had experienced an MRO trigger told the survey they felt they did not have a genuine choice between a tied and a free-of-tie option.

Survey respondents said this was because of a lack of transparency around rent calculation, the costs of the MRO proposal or a lack of encouragement from their pub company’s business development manager (BDM).

A PCA report detailing the survey results said: “A majority of tenants rated their BDM positively in terms of adhering to administrative elements of the Pubs Code but fewer agreed that the general support given, and confidence in managing their tenancy, was as effective.”

More user-friendly information needed 

PCA Paul Newby said the survey results identified a number of priority areas “specifically that more needs to be done across the industry to provide more user-friendly information and greater clarity on MRO issues, and to make progress in changing the culture around the behaviour and operation of BDMs”.

He said he was concerned by the survey evidence showing how often BDMs are changed and the low frequency of contact with tenants.

“The deputy PCA, Fiona Dickie, and I have provided clarity on the terms of MRO tenancies following recent arbitration awards; advice on this issue was published last week​,” Newby said. “We are now working on a more detailed response to this survey which we plan to publish shortly. However, the survey provides much food for thought for the pub-owning businesses and I am calling on them to consider their responses to the challenges highlighted.”

He also said that the survey results would help the PCA to target its activity, take up issues of concern with the pub-owning businesses and track progress.

Brigid Simmonds, chief executive of the British Beer & Pub Association (BBPA), said it was encouraging that a "clear majority" of tenants are aware of the code, including their right to request an MRO.

'PCA role to expand knowledge'   

Citing findings from the report, she said: “A majority also stated that the relationship with BDMs continues to demonstrate real value. The findings show that some tenants are not aware of specific elements of the code and the role of the adjudicator. It is clear that the PCA has a role to play in expanding knowledge, awareness and clarity.”  

Simmonds emphasised that it was important to acknowledge that the results account for a period in which tenants and pub owning companies were adapting to a new and complex system of regulation. “There was no transition or implementation period for the code, so it is inevitable that new processes and relationships have taken time.”

“The BBPA and the six companies covered by the legislation are committed to looking at the findings of the survey in detail. We will continue to work closely with the adjudicator and other stakeholders to ensure that tenants are fully aware of their rights under the code.”

Related topics: Legislation

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