A sorry tale about the Pub Code Adjudicator (PCA) and the New Pub Co Legislation and why we cannot recommend taking a Pub Co Tied Lease or TAW.
We have for many years run this web site to make sure that people buying pubs are fully aware of their responsibilities and access is available to the information that all the so called professionals involved in the purchase of pubs, omit to mention.
The problem is that there are so many professionals in their various fields that the crossover is frequently missed, causing many problems for the uninformed and the unwary.
When we first set up this site, there were Tied Tenancies, usually with the Family Brewers, which is the only Tied agreement that we would now endorse, there were Free of Tie leases operating as Free Houses and Freehold Freehouses which I and my colleagues owned.
The Pub Co’s that now fall within the New Legislation brought in these Tied Commercial Leases, where the serious failure rate has been enormous compared to Tied Tenancies, mainly through lack of knowledge by their lessees of their responsibilities in respect of a Tied Commercial Lease and many Pub Co’s uncompromising attitude to struggling lessees, who become expendable the moment they have problems, all totally legal with a Commercial Lease, but morally unacceptable.
The New Legislation was finally brought in just several years ago, following four Government Inquiries into major Pub Co’s Activities.
The major Pub Co’s have gone to extreme legal lengths to avoid complying with this Legislation, which is well documented.
The Government in it’s wisdom appointed a Pub Co Adjudicator (PCA), which raised a number of objections since his former clients were at least one or some of the major Pub Co’s that the new Legislation was brought in to control.
He also retained at that time a number of shares in his former practice as a major partner, which raised further objections.
The PCA brief was to control the major Pub Co’s and make them comply with the new Legislation, which would appear to have failed miserably, the Pub Co’s who employ the best legal brains in the Industry, can afford to find endless legal ploys to protect their interests against this Legislation.
The other commitment by the PCA is to advise all people looking to take a Pub Co Tied Commercial Lease of their responsibilities within that lease, both short term and long term.
It could be argued that the PCA has failed in many cases to ensure that all people taking Pub Co Tied Commercial Leases are fully aware of these responsibilities since it is part of the PCA brief, does this mean that the PCA could be legally liable for any failed lessees who have not had full in depth responsibilities given to them from the PCA?
The PCA is obliged to provide the Pub Co’s information about any and all questionable issues that arise within the Legislation under the legal term Reasonableness, he should therefore have the same responsibility towards people looking to buy a Pub Co Tied Commercial Lease under the same legal term Reasonableness.
Does this mean that the PCA should give equal in depth advice to potential Lessees under Reasonableness, it should, but is unlikely to happen, very few of the PCA or his staff have ever taken a Tied Pub. let alone a Pub Co Tied Commercial Lease and the vagaries that can be legally exploited under a Commercial Lease.
The one thing that Pub Co’s cannot control are the amount of people looking to take their leases, if you can stop people looking for Tied Commercial Leases, the Pub Co’s will have to accept the Legislation, including the Market Rent Option (MRO)
Having spoken to a member of his staff and been asked to send them an email about my suggestion to ensure every person considering taking a Pub Co Tied Commercial Lease was made fully aware of their commitments.
We had set out a series of questions, with detailed answers that everyone should get positive answers to from the relevant Pub Co, before they enter into negotiations, it would save them a considerable amount of money and a far better understanding of Commercial Leases.
In our opinion Tied Commercial Leases are toxic for family occupation, there is no security of tenure if you breach certain clauses in the lease, you can be evicted within a week, depending on the eviction clause in the lease, which many people fail to understand that contact us.
One of the Family Brewers websites has similar questions and answers, with a comment, not to take a Tied Tenancy if you get a negative answer to any of the questions, the QA’s look remarkably similar to our own written some years ago, if they have been used we are delighted to help.
We sent emails to the PCA with links to the QA’s and got no response, it would appear that they were consigned to Trash.
Further emails and an apology, a meeting was arranged and a representative met me, he appeared to be struggling, never having been in the Pub Co business and it’s vagaries.
The suggestion that the use of the QA’s was under consideration.
I heard shortly afterwards that he was no longer with the PCA, I made a further call asking whether they had decided to use the QA’s as part of their brief and got short shrift saying that the PCA does not discuss ongoing situations.
Sadly, the PCA as the Arbiter between Pub Co’s and their Lessees has a left a nasty taste in many mouths and the feeling is that the New Legislation has been beaten legally by high priced lawyers, far beyond the Lessees Purses to contest.
The PCA would appear to have backed down in their brief to ensure every would be Lessee is fully aware of their legal commitment on considering or taking a Pub Co Tied Commercial Lease, end of this sorry tale.
Note:-We are getting hundreds of people reading the articles about why they should not take a Tied Pub Co Commercial Lease, unfortunately it would appear that the PCA is struggling against the Legal Might of the Pub Co’s, so the New Legislation is struggling and making little difference to the hopes of many existing and would be licensees.
Questions that need answering and Links.
Pub Co Tied Lease
Click on this LINK for our thoughts on Answers to the Questions above, so that you may be able ask suitably direct questions and get answers that you understand.
Family Brewer Tied Tenancy LINK
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The views expressed are not necessarily the editors and www.buyingapub.com accepts no responsibility for them, we do try to avoid offensive or litigious statements being made. They are written by concerned professionals in the industry who feel that these issues should be raised to ensure that all licensees are made fully aware of many hidden pitfalls.
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