Pubs code: Tenants not aware of right to price match on insurance and new statutory guidance issued on arbitration referrals
The short pulse survey, which had 51 respondents, was open from 5 to 16 July 2021, and looked at tied tenant awareness of pubs code rights in relation to premises insurance, and if and how tenants had used those rights.
The results, according to the PCA, suggest that awareness of insurance rights needs to improve, including the right to price match the pub-owning business’ (POB) policy.
The results revealed that out of the 16 respondents who had used this right, 44% had successfully price matched.
Of the 51 respondents, only 22 (43%) were aware they had insurance rights under the code.
Awareness of a tenant’s right to find a cheaper policy that is ‘suitable and comparable’ and for the POB to purchase it or not charge the difference (‘price match’) was notably low as only 15 out of 51 respondents (29%) knew about this, the PCA said.
Tenant awareness
Fewer respondents were aware of the specific duties placed on the POBs when buying or renewing insurance. The PCA said this this suggests there is more to do to raise tenants’ awareness about what their Code insurance rights are.
The PCA has reminded POBs that they have a key part to play in reminding tenants of their Code rights at the appropriate time. It said this is before the POB buys or renews premises insurance and intends to charge the tenant an amount in respect of the premium.
In a statement the PCA it was looking closely into this issue.
“What these results do not tell us is why those tenants were able to price match when others could not. The pubs code places duties on the POB to make sure tenants have enough information to seek a suitable and comparable policy,” the PCA said.
“But some tenants and representatives have already started to tell the PCA about challenges they can face in finding a cheaper policy that a POB will accept as being ‘suitable and comparable’.”
Arbitration Awards
This week the PCA has also issued new statutory guidance after recent arbitration awards showed differing interpretations of the time limit for a tied pub tenant to refer a dispute to the PCA for arbitration where it is not about the market-rent-only (non-MRO) option.
In summary, the PCA’s view is that a tied pub tenant has four months and 21 days from when a dispute arises to refer the non-MRO dispute to the PCA for arbitration.
The PCA said it took action after it received a number of arbitration awards dealing with a preliminary issue about whether a tied pub tenant made a non-MRO referral for arbitration in time.
