PCA COLUMN

Improving the tied tenant and business development manager relationship

24-Oct-2023 - Last updated on 25-Oct-2023 at 09:09 GMT

Ongoing work: PCA Fiona Dickie says there will be another tenant survey early next year

The relationship between the business development manager (BDM) and tenant is a significant one.

They provide support and expert guidance to tied tenants as they navigate such matters as business planning, marketing and repairs. So, it is good news the results of the PCA’s 2023 Tied Tenant Survey show 81% of the 1200 surveyed who enjoy pubs code rights felt their BDM was fair in discussions with them.

This is up 5% on last year. Tenants who said their BDM provided them with accurate notes of discussions was also high at 72%. These improvements are a testament to the hard work of many BDMs from each of the six regulated pub companies to deliver fairness, which is at the heart of the pubs code.

My team and I have had the opportunity to see first-hand the work that BDMs do. We have all recently been out in the field with a BDM to witness the support they provide, and to talk to tied tenants about how the pubs code helps their businesses. This was a great opportunity to talk to tenants at a time and place convenient to them. We have published blog-style accounts to share what we saw on some of our visits, which can be read here.

Raising the bar on the standard of service the BDM offers to the tied tenant has been central to the pubs code’s effectiveness. Now seven years on from the start of the code we have clear evidence that this relationship is working well. Tenants have been happy to talk to us about their positive relationships with their BDM and pub company, and how their pubs code rights supports this. Two new videos we have produced are worth a watch. These show a range of tenants from Admiral and Marston’s talking about how the pubs code has improved things for them, in their words “making a massive difference”.

Reviewing how BDMs manage repairs and dilapidations

Although we are hearing positive stories, the PCA’s survey did highlight areas for improvement. A key one is the BDMs handling of repairs and dilapidations. While 37% of tenants were satisfied with this, 45% were not. Leaseholders (who typically will have full repairing liability) were the least satisfied.

To better understand how repairs and dilapidations under the code are being handled, I have spoken with pub companies and other stakeholders, and have now published a report on this review. This work looked at how pub companies provide information to tenants on their repairing liabilities and the condition of the property at the start of their agreement, as well as how repairs and dilapidations are managed at other key points in the agreement.

This is part of our ongoing work to encourage pub companies to understand what fuels tenant dissatisfaction around these issues. I expect pub companies to consider how they can innovate to improve their service to tenants, efficiently manage any issues that arise and avoid disputes.

How the pubs code has changed the BDM relationship

The pubs code places a duty on the pub company to make sure the BDM deals with tenants fairly and lawfully, and that the BDM receives appropriate training on the pubs code. The pub company must also provide tied tenants with information about the BDM’s role and the support and guidance they can expect from their BDM. This is a result of pre-code concerns about the relationships between large pub companies and their tied tenants, in particular around failures to carry out agreed repairs, or verbal agreements being ignored.

BDM conversations with the tied tenant under the pubs code must be fair and they must record all agreements so they can be honoured. This is a simple but powerful mechanism, which means transparency for tenants and accountability for pub companies.

The BDM must make notes of what is said in discussions about rent negotiations, repairs and business planning. They then have to give that note promptly to the tenant, who then has the opportunity to say if they disagree with any aspect of it. An accurate and approved record of what was said and agreed is a great way of avoiding disagreements down the line. Tenants have told us how useful it is to have written notes from previous meetings, so they can refer to them at any point.

But the PCA and industry must not be complacent. Our tenant survey will run again in early 2024 and I’ll be looking closely at how pub companies have addressed those problem areas for tenants and what this means for overall satisfaction with their pub company.

There is further information on the duties of the pub company in relation to the BDM on our factsheet.

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