£2.7m rent dispute between Wellington and tenants

Wellington Pub Company is owned by the Reuben Brothers and managed by Criterion Asset Management. In May 2019, The Sunday Times Rich List ​estimated the family had a net worth of £18.66bn.

Licensees previously told The Morning Advertiser (MA) ​​of their despair about a lack of communication from the group​​ and rebuffed the landlord's offer​ of three months' free rent and two quarters charged at 50% last year.

This month (January 2021), a number of tenants responded to a questionnaire which saw 144 responses collected via Google forms between 3 January and 14 January and 135 included in the analysis (after the removal of duplicate entries).

More than half (52.7%) of the 131 tenants who answered the question of ‘what rent have you paid for the March, April, May 2020 quarter’ forked out rent in full for this period when pubs were forced to close by the Government.

As the survey covered about a quarter of Wellington’s tenants (more than 700), it is estimated that this outstanding rent could be as much as £10m and more.

The MA ​contacted Wellington Pub Company/Criterion Asset Management for comment but had not received a response at the time of publication.

A statement on its website was updated in December 2020 in relation to the tiered system and restrictions due to coronavirus.

It read: “Wellington shares the concerns of its tenants in these uncertain times. We await further clarification from the Government on these types and timing of measures in respect of Covid-19.

“We hope our tenants remain safe and healthy at this particularly difficult time for the hospitality sector.”

Open discussions

The group’s website also displays a statement from November 2020 – when the second national enforced closure took place - stating: “Further to the Government announcement of the second lockdown starting on Thursday 5 November 2020 and remaining in force until Wednesday 2 December 2020, Wellington can confirm the following:

“Tenants that already have a documented packaged of support for the coronavirus pandemic, will receive a further rent-free period covering the latest lockdown.

“The relevant property manager will be in contact to discuss with you directly. We remain open to discussions with all remaining tenants to find a mutually beneficial solution to support them during the current and previous periods of closure, brought about by the coronavirus pandemic.”

However, this is something surveyed tenants have disputed as they have criticised Wellington’s communication.

The website also has a statement dated October 2020, which outlined how many tenants had agreed to a rent-free support package.

It read: “As at today (October 2020), over 50% of Wellington tenants have agreed to a package of rent-free and rent concessions along with an extended lease agreement to assist them during this time and to allow them to recover from the significant drop in trade, experienced during the enforced closure of hospitality businesses between 21 March and 3 July 2020.

“We are continuing to work with the remaining tenants to support them and agree a mutually satisfactory outcome that keeps their pubs open and our tenants successfully in business.

“This is a challenging target, but we can assure you we have a dedicated and experienced team in Criterion, who are committed to working hard and supporting our tenants through this crisis.”

No action on rent arrears

The statement also claimed the company appreciated the anxiety and concern shared by publicans across the nation.

It added: “We value every single one of our tenants and are determined to work with them through this unprecedented crisis.

“We have already confirmed that until meaningful dialogue has taken place, Wellington will not be taking any action with regard to rent arrears that may have arisen since the start of the Covid-19 crisis and specifically the period relating to the shutdown of hospitality businesses across the UK from March to July.

“As such, we want to take this opportunity to be absolutely clear that we want to work together with our tenants as we do not want to see them lose their businesses solely due to the Covid-19 crisis.

“Wellington Pub Company, as a business, also has obligations in the form of a securitisation for which payments must be made quarterly and as per earlier statements, invoices continue to be raised in accordance with lease/tenancy agreements and other legal requirements.”

However, the member analysis claims this was nearer to 40% of tenants having agreed the deal.

The MA ​understands the most common “package” offered is three months rent free, six months at half rent in exchange for a five-year extension on their lease.

It is understood that should tenants turn down this offer, Wellington is not open to negotiation with its licensees on this and has instructed solicitors to send out demands to original lessees in the case of assigned leases.

Wellington also came under fire last year when tenants called upon the company for clearer communication and the recent survey claimed tenants were still in the dark and communication had not improved.