There is nothing legally wrong with a Pubco selling the freehold of a supply-tie leased pub to anyone that they choose. Although there is a moral implication, there is no legal obligation that the freehold should first be offered to the lessee in occupation. This understandably money-return based corporate attitude of maximising assets, is stronger than ever in central and greater London and we have witnessed the following – almost now standard – tactics with increased and disturbing regularity.
Pubco sells freehold interest to developer. Developer marches in to see the tenant and declares that they are now the new owners and “things will change dramatically”. Shortly thereafter, a letter turns up from the developer’s solicitor declaring that the supply-tie has now been revoked, the trading operations are free from tie and that an automatic rent review will be triggered under the terms of the lease. MORE