Rent Review & Renewals
Morgan & Clarke are recognised as market leaders in negotiations at rent reviews and lease renewal. We do not accept instructions to advise or act for PubCos in either rent review or lease renewal instructions and will never do so. Our independence of thinking and client advice is of paramount importance to us. We act only for small private landlords and extensively for tenants.
That independence is crucial in that we do not take the Pub Cos, 'landlord’s shilling', and also act against that same landlord representing the tenant. Unlike many other property specialists in this sector, we will never sacrifice our independence by somehow justifying being in both camps at the same time. Our professional services are solely dedicated to the tenant or small private landlords. Even if we were invited to give a Pub Co independent expert advice, we would decline the instruction because it would be taking their fees. We do not go there.
At Morgan & Clarke, we are steeped in years of experience in representing both tenants and private landlords in Arbitration, PIRRS or Independent Expert referral (Pubs independent rent review service) together with acting as a fully accredited Expert Witness at County Court, High Court and Lands Tribunal.
Read on to see our frequently asked questions about Rent Review and Lease Renewal
What if we can’t agree on a new pub rent?
Rent review or lease renewal can prove to be a difficult time for any licensee or tenant. If a rent review is yet to be settled using one of the routes detailed below, it is recommended that the tenant or licensee seek appropriate professional advice before preparing their case.
Rents are usually settled and agreed through discussion and negotiation with your Pub Company. Tenant or lessees may wish to handle negotiations themselves. However, most licensed trade surveyors or valuers will be able to assist with negotiations if required, especially in circumstances where a compromise or agreement seems unlikely.
If the tenant or lessee is unable to agree the new rent, tied or MRO, through negotiation, there are dispute resolutions available. So, what are your options if you cannot agree on the rent? Common routes for rent resolution include:
The Pub Independent Rent Review Scheme (PIRRS); or
Independent Assessment (For those considering MRO under the Pubs Code); or
Pubs Independent Rent Review Scheme (PIRRS)
For tenants and lessees disputing the level of tied rent, they should consider PIRRS. The scheme aims to offer an independent yet low-cost rent review resolution services for tied pub tenants and lessees based in England, Wales and Scotland.
PIRRS will refer the case to an independent valuer chosen from a panel of experts and both parties will be asked to provide relevant information and submissions, presenting each of their cases. The rental figure is then determined and presented to the parties in a final report by the independent valuer.
The scheme is offered on a fixed fee basis, which is payable to the chosen valuer at the start of the case. Details concerning fees are available on the PIRRS website.
Market Rent Only
There has been great focus on the Pubs Code in recent years, which applies and regulates Pub Owning Businesses (POB’s) with over 500+ tied premises in England & Wales, and the Market Rent Only option (MRO).
For those considering MRO, where a tied pub tenant serves a MRO request notice, the POB has to provide a compliant MRO full response, detailing their proposal. Once the mode of delivery and terms of the new MRO agreement, or lease, have been agreed, the parties are required to negotiate the level of MRO rent. The tied pub tenant has the right to refer the MRO rental to an Independent Assessor for determination if they do not agree with the proposed MRO rent, this process is rather complex as it involves a number of crucial time dependent deadlines. The parties must seek to jointly appoint a suitable IA within 28 days from the tenant’s referral setting out their intentions of progressing to independent assessment, or inform the PCA of their failure to appoint.
In cases where the parties have been unsuccessful in agreeing to the joint appointment of an IA, the PCA will need to be notified and within 14 days they shall appoint an Independent Assessor on behalf of the parties. Again, this process is extremely strict on the associated time frames and particular forms submitted, expert support is required so as to preserve your position and ensure your efforts are not wasted.
Click here to read our MRO FAQs.
Pub companies currently regulated by the Pubs Code are:
Admiral Taverns Ltd
Ei Group PLC (Recently taken over by Stonegate, formerly known as Enterprise Inns PLC)
Greene King PLC
Star Pubs and Bars (Heineken UK)
Punch Taverns PLC
The Independent Assessor fee is based on the current annual rental value of the pub:
Rental value is £25,000 or less the Independent assessor will charge no more than £3,000
Rental value is between £25,001 to £50,000 the Independent assessor will charge no more than £4,000
Rental value is between £50,001 to £75,000 the Independent assessor will charge no more than £5,000
Rental value is £75,001 or greater the Independent assessor will charge no more than £6,000
Arbitration is a legal process that can be relied on to determine rent reviews for various types of commercial property, including public houses. It should be noted that arbitration can be both time consuming and costly. The process is often extremely technical and procedural, so it is strongly advised that tenant or licensee takes up the advice of an experienced and specialist valuer to ensure that their case is best represented.
It is important to note that the arbitrator can order parties to pay all, or part, of the costs incurred as a result of arbitration, including the fees incurred by the other side. This route is considered a last resort, the alternative dispute resolution services covered in this write up offer similar functions at a lower cost to the tenant or lessee, these should be exhausted first.
Strength of Case Review - No Obligation
We offer a free of charge, Strength of Case Review for every rent review or lease renewal case that is referred to us.
This service, which is both confidential and without any obligation whatsoever, enables both ourselves and our client to take stock of the current position, offers made, etc. The review takes the form of a ‘desktop’ study of financial and background information. A firm recommendation backed by a reasoned opinion is then issued. No charge is made for this service and there is no obligation as to any further ongoing relationship. We take pride in being at the cutting edge of our specialisation to the benefit of current and future clients.
To learn about the key areas associated with rent review and lease renewal, read a selection of our articles below;
Click on the above links to take you to each article website page.