According to a statement released by the office of the PCA yesterday (2 April), the six businesses – each being the owner of 500 or more tied pubs in England and Wales – informed the industry regulator that they do not expect to be able to comply with crucial pubs code duties during the ongoing pandemic.
These include serving compliant rent proposals, rent assessment proposals and market-rent-only (MRO) option full responses.
As such, the directors of Admiral Taverns, Ei Group, Greene King, Marston’s, Punch and Star Pubs & Bars have signed a formal declaration designed to protect tenant rights during the ongoing pandemic.
The PCA’s website states the declaration “stops the clock” from 16 March 2020 until 30 June on many code deadlines applying to tenants making arbitration referrals and provides safeguards specifically relating to MRO rights.
However, the industry regulator stressed the measures outlined do not prevent any tenant from taking code steps to access their rights during the pub shutdown and that pubs code duties on the regulated pub-owning businesses have not been suspended.
Expectation of good faith
“The pub-owning businesses have recognised that these are exceptional times and have agreed with the PCA that tenants should be given complete confidence about the status of their pubs code rights while the sector focuses on meeting the challenges of the Covid-19 emergency,” PCA Paul Newby who will step down in May explained.
“As a result of our discussions, each pub-owning business has signed a declaration that applies from 16 March to pause and preserve those rights and allow them to be reactivated when the emergency period has ended.
“I very much welcome the collaborative approach the pub-owning businesses have adopted and I expect them to act in good faith in the dealings with their tenants.
“The deputy pubs code adjudicator and I will continue to actively monitor the impact of this emergency on tied tenants of the regulated companies.
“We will introduce further measures should these become necessary.”
Preserving code rights
According to deputy PCA Fiona Dickie – who will become PCA in May – the inability of the six regulated companies to fulfil their code duties during the pub shutdown represents a “harsh” reality though she believed the signed declaration mitigates any knock-on effects on tenants.
“Most importantly, this gives certainty and reassurance to tenants,” she explained.
“These measures are intended to run until 30 June but will be subject to review. We will give clear notice to tenants about when these measures will no longer apply and the deadlines tenants will then need to follow.
“These declarations have the effect of stopping the clock and preserving code rights. For example, they remove the time limits for tied tenants to request a MRO option if they receive a rent assessment proposal or for them to refer non-MRO issues for arbitration.
“In addition, where a pub-owning business fails to give a tenant a full response to an MRO request, the pub-owning business itself will refer the matter to the PCA for arbitration so that the tenant does not have to but with the added request that the arbitration is stayed to allow the response to be given after the emergency.”
Dickie added pub companies have also agreed to inform the PCA if they intend to notify tenants of any price increases during the shutdown period so the regulator can consider whether additional measures are required to protect code rights.
“They have told us that they will not be serving any notices under section 25 of the Landlord and Tenant Act during the emergency period,” she added.