Covid-19 & Pub Rents
Admiral – Punch – Star Pubs & Bars – Marston’s – Greene King – EI Group
Currently the majority of publicans operating agreements from the regulated pubco’s listed above are still being charged rent despite Covid 19 restrictions closing all UK pubs (i.e. payments are being added to the pub rent account increasing the debts of any tenant).
We hold the view that any pub, whose rent was assessed on the basis of fair maintainable trade (i.e. a profits method valuation), should not be paying rent when there is no trade. Further that pubs should be doing all that they can to adjust levels of rent set or assessed under different circumstances, as when restrictions are lifted it is very foreseeable that the pubs trade is going to be impacted and may not recover for a long time to come. So what can be done about the rent you have now, can it be re-assessed now to take into account the changes to the trade in the months ahead?
The good news is for many of you is YES it can be and PAS can help.
Its true to say pub rents have never been further out of kilter than right now, it is of critical importance for publicans to trigger a rent review if they can (now called a rent assessment under the pubs-code). Most pub agreements do not automatically allow for such an assessment but the tied tenants of regulated pub companies have statutory rights they can fall back on to help “trigger” rent assessments.
We think triggering rent assessments now will be of immense value as even if you have a sympathetic landlord it remains very uncertain if the sales will return to previous levels of activity when restrictions are finally lifted. Millions of people have been laid off or had their employment disrupted and there are considerable and long-lasting health concerns related to people gathering socially both of which will affect consumer behaviour for a long time to come.
Consider if your rent goes back to 100% when pubs re-open but the trade and level of sales are far from normal and (say) 10% 20% or 50% down from previous – what can you do to redress the huge imbalance of a rent that is no longer representative of the market conditions? Imagine for a moment what any “willing tenant” acting prudently would bid or pay rent wise if the they took a pub on right now?
Help from experts
We have been examining the various options under the regulations and applying all we have learned from running many successful pubs code referral cases with tied publicans over the last 4 years. PAS has a long history in championing tenanted reform and a successful track record in using the pubs-code and representing tenants in disputes. We know exactly what works and what rights you have when it comes to pubs code regulations.
New service launched
As we said above the good news is we have identified a route for tenants and lessees of the regulated pub companies to trigger a rent assessment now. We think our new service will apply to the vast majority of those renting from the regulated pub companies but we will need to assess each case on its merits and need to check some key paperwork. Early analysis of sample paperwork we have has shown us already that even publicans who have had a rent assessment less than a year ago could still do this!
We are confident we can help a large number of pubs right now, if you would like to explore the opportunity with us then please submit an inquiry via the form on this page – we will be in touch.
Take care and stay safe