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Pub Code Adjudicator: Statutory advice from the Pub Code Adjudicator 2nd March 2018

Pub Code Adjudicator: Statutory advice from the Pub Code Adjudicator 2nd March 2018

Statutory advice to provide clarity on the terms of Market Rent Only (MRO) tenancies has been published today (Friday 2nd March 2018)

This clarification from Pubs Code Adjudicator (PCA) Paul Newby and deputy PCA Fiona Dickie follows recent arbitration awards. The advice outlines:

  • A Market Rent Only (MRO) proposal does not have to be by way of a new agreement.
  • The content of a MRO agreement rather than the form is the important factor.
  • The terms of the agreement must be reasonable and consistent with the core principles of the Pubs Code – tied pub tenants should be no worse off
  • Tied pub tenants have limited negotiating power and the PubCo pub owners should not take advantage of this.
  • PubCo negotiations with a tenant seeking a MRO agreement should be meaningful.
  • It is likely the Pub Code Adjudicator may find it unreasonable for the pub-owning business to offer unattractive MRO tenancy terms if the intention is to persuade the tenant to stay tied.
  • Tenants should not need to rely on arbitration
  • Moving forward, referrals for arbitration should be the exception and not the norm

Paul Newby the Pub Code Adjudicator even includes a little self criticism into the advice when he identifies the need to ensure unnecessary barriers are eliminated. His hope is that advice gives a strong yet simple steer on what pub-owning businesses can reasonably ask from their tenants in a MRO-compliant tenancy and sees this as a major step forward in delivering the MRO rights Parliament has given tenants.

The full statutory advice is available at https://www.gov.uk/government/publications/pca-advice-note-market-rent-only-mro-compliant-proposals

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