Understanding the tied tenant experience

By Fiona Dickie, pubs code adjudicator

- Last updated on GMT

Opinions wanted: pubs code adjudicator Fiona Dickie said the next tied tenant survey will be starting soon
Opinions wanted: pubs code adjudicator Fiona Dickie said the next tied tenant survey will be starting soon

Related tags Legislation Pubs code Pubs code adjudicator Pubco + head office Tenanted + leased

The pubs code is a powerful piece of legislation, but I need to know how it is working in practice and tenants are the key voice.

I know they are busy people, so I really appreciate the time they take to complete our annual tenant survey and the next one will be starting soon.  

While the data is important, I understand there are real people behind the numbers, and many are worried about their future. This makes me even more determined to reach out to show the power of the Code and the difference it can make for tied tenants. Following on from other recent industry engagement​, and with an Admiral tenant podcast in the can, this month I was also pleased to meet with Campaign for Pubs and the British Pub Confederation to share perspectives and hear their views.   

Getting ready for the 2023 tied tenant survey

Back in July I wrote in The Morning Advertiser​ about the results of the pubs code adjudicator (PCA)’s 2022 tied tenant survey, which gathered the views of 600 pubs code tied tenants. Among other insights, this survey told me how satisfied tied tenants were with their pub company relationship and where the pain points are. I have been acting on this feedback and I expect the pub companies to have been doing the same.

My team is now preparing for the 2023 survey, which will once again be carried out by independent survey company, Ipsos. I’m pleased to be able to report that this time we are doubling the number of participants to 1,200. This means hearing from even more tenants and getting better comparisons between the six companies.

Surveying of tenants will take place in January and February 2023, after the Christmas rush is over. If you are a tenant and Ipsos contacts you to take part, I really hope you will agree to share your views. They are very important.

I want tied tenants, the wider industry, and new entrants to it to know how well each pub company is doing in making the tied business relationship work fairly for their tenants. Responsible regulated pub companies will welcome this opportunity to find out where that relationship is working well and where they could do better. 

This year’s survey showed me that the management of repairs and dilapidations is a problem for tenants. The pubs code places important duties on pub companies in relation to repairs and dilapidations and I have since published an easy to read Factsheet​ to help tenants understand these important rights. I’ve asked that all business development managers bring this factsheet to the attention of their tenants.

As I previously discussed​ in The Morning Advertiser​, the pubs code aims to lay the groundwork for effective management of repairs. It does this by ensuring the pub company documents all information about the pub condition, repairs responsibilities and agreements at the outset. There must then be a repairs paper trail throughout the tenancy to help avoid disputes about costly dilapidations at its end. My team is doing further work to make sure pub companies handle repairs fairly in line with their code duties.

Tenant experience at the start

Ensuring tenants get the information they need to make the right business decisions is at the heart of the pubs code. In the 2022 tied tenant survey, of those who took on their tenancy after the code came into force in 2016, 83% said the new tenant information​ they received as a result of their code rights at the time was useful. However, fewer (59%) said their sustainable business plan was useful in managing their tenancy. The code requires pub companies to ensure that those considering taking on a tenancy have produced a business plan, on the basis of professional advice, before they sign up.

I recently published a pubs code action​ story about work my team has been doing with the pub companies to improve the tenant experience when taking on a new agreement. This includes looking at how the sustainable business plan is reviewed throughout the tenancy and updated as necessary. The business plan should remain a useful basis for discussion and decision-making, and not be put to one side once the hard work of running the pub begins.

Star concluding investigation recommendations

After my investigation findings of Star’s multiple breaches of the pubs code in relation to its stocking requirements in market-rent-only (MRO) option tenancies, I published its plan​ for implementing my binding recommendations. These included putting right the harm caused to tenants. I am pleased to say that process is almost complete and you can read the PCA’s update on Star’s compliance here​.

Star has been reviewing its MRO procedures that were ongoing to ensure the stocking terms in free of tie tenancies are reasonable. Importantly, it has also been removing unreasonable stocking terms from agreed MRO tenancies already in the market. In all affected cases, Star has reduced the amount of Heineken products that the free of tie tenant is contractually obliged to stock.

This outcome really represents the power of the Code in making a difference for tied tenants and to deliver on its core principles that they get fair and lawful dealing from their pub company and are no worse off than if they were free of tie. It also indicates progress Star can make in applying those principles for its tenants.

This column is intended to aid industry understanding about the pubs code and its impact. Nothing in it should be understood to be a substitute for the pubs code legal framework.

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