How to use this factsheet:
This factsheet is for tied pub tenants who want to know more about provisions in the Pubs Code about what a pub-owning business is required to do for new tied pub tenants when they are considering entering into a new tied pub agreement.
It provides information to support tenant understanding. It is not a substitute for the Pubs Code legal framework.
You can find technical guides on our website which provide more detailed information about the Pubs Code provisions. We recommend that you refer to these guides if you would like more information and/or are considering accessing your rights under the Pubs Code.
Our website also contains other useful information about accessing your Pubs Code rights.
Terms and abbreviations
| Term/abbreviation | What it means |
|---|---|
| Code | The Pubs Code etc. Regulations 2016 |
| CCO | Code Compliance Officer. Someone employed by the POB who is suitably qualified and whose role is to verify its compliance with the Code |
| LTA | Landlord and Tenant Act 1954 |
| MRO | Market Rent Only |
| MRO option | The option for you to occupy the tied pub under a MRO- compliant tenancy and to pay a rent you have agreed with the POB in line with the MRO procedure or, failing such agreement, the market rent |
| New agreement | A new tenancy of, or licence to occupy, premises which are, or are expected to be, a tied pub but does not include a short agreement or the renewal of a tenancy or licence |
| PCA | Pubs Code Adjudicator |
| POB | Pub-owning business (often referred to as pub companies) |
| Pubs Entry Training | Training which is designed to raise awareness of the matters involved in operating a pub and entering into product ties and other agreements |
| Protected LTA tenancy | A tenancy that has the benefit of security of tenure under the Landlord and Tenant Act 1954 |
| Rent Proposal | A proposal made in accordance with Part 3 of the Code |
| Sensitivity Analysis | An analysis of the potential business performance of the tied pub in the case of an increase or decrease in business income, and the effect on the pub’s costs and profitability |
| Short agreement | A tenancy at will, or any other contractual agreement entitling a tenant to occupy a tied pub for no more than 12 months |
| TPT | Tied Pub Tenant (including a prospective tenant) |
1. When do my Code rights apply?
You have Code rights if you are considering renewing a pub agreement under either of the following:
- the Landlord and Tenant Act 1954 (LTA)
- any contractual terms in the existing agreement (not a protected LTA tenancy).
The duties of the pub-owning business (POB) and your rights to information are different depending on which of the above situations apply.
This factsheet does not cover your Code rights when you and the POB are entering into a new agreement that is not a renewal of an agreement either under the LTA or the terms of the existing tenancy. See our factsheet on what a POB must do when you are considering a new agreement.
1.1 The Market Rent Only (MRO) option
Renewal of a pub agreement, either under the LTA or the terms of the existing tenancy, is one of four gateways allowing you to request a MRO option.
Please be aware that there are strict deadlines for when you can request a MRO option as part of a renewal.
You can find out more about the MRO process, including when and how to access your rights in our factsheet.
2. What must a POB do if I am renewing an agreement under the LTA?
2.1 At a Glance
Steps before you renew an agreement under the LTA
| POB | Tenant |
|---|---|
| Provides you with a rent proposal (if you request one) and advises you to obtain independent professional advice about that rent | Request a rent proposal from your POB |
| Identifies reports that analyse tied pub trading and tenancy costs and provides relevant data to allow you to compare the premises’ performance | Consider the information received |
| Advises you to complete Pubs Entry Training | Complete your Pubs Entry Training (as needed) |
See below for further information on the POB’s duties to you set out in this table
2.2 Information the POB must provide to you
Before the tenancy is renewed the POB must:
- Identify publicly available reports that:
- analyse the trading and tenancy costs of tied pubs in the UK
- provide relevant data against which you can compare the performance of the tied pub
- Provide you with copies of these reports, or tell you where and how you can find them
- Advise you to consult the reports identified.
2.3 Rent Proposal
If you are renewing your tenancy under the LTA, the Code says you can ask the POB for a rent proposal, which it must then provide.
Please note: in order to be entitled to a rent proposal at renewal of a tenancy you must request one from the POB. There are strict time limits for you to request a rent proposal.
For information about when you can request a rent proposal and what the POB must provide as part of a rent proposal, see the PCA’s rent proposal factsheet.
Before you agree to pay an amount of rent, the POB must advise you to obtain independent professional advice about that rent.
2.4 Pubs Entry Training
Before agreeing the renewal of the tenancy, the POB must advise you to complete pubs entry training.
The POB does not need to advise you to complete pubs entry training if any of the following apply:
- You operate at least one other tied pub
- You can show you have at least three years’ relevant business management experience
- The POB has previously granted you a tied tenancy.
2.5 Condition of Premises
The POB should specify in the tenancy the condition of the premises. This is known as the “Schedule of Condition”. This is then used or is updated in various circumstances before and during the tenancy. Where a tenancy requires that you carry out repairs or maintenance of the tied pub, before renewing the tenancy the POB must take the Schedule of Condition into account when assessing any maintenance or repairs required at the premises, or before any obligations about the condition of the premises are agreed.
3. What must a POB do if I am renewing an agreement under its contractual terms (not a protected LTA tenancy)?
3.1 At a Glance
Steps before you renew an agreement under its terms
| POB | Tenant |
|---|---|
| Provides information to you, including on the tenancy, the rent, the premises and the Code | Consider professional advice on the information received |
| Identifies reports that analyse tied pub trading and tenancy costs and provides relevant data to allow you to compare the premises’ performance for the purposes of preparing your business plan | Prepare your sustainable business plan |
See below for further information on the POB’s duties to you set out in this table
3.2 Information the POB must provide to you
A POB must make sure you have received certain information before you consider any independent professional advice for your sustainable business plan. This helps to make sure you are informed before you renew the agreement.
A POB must provide information about the following:
- The Pubs Code and any code of practice the POB may have for dealings with tied pubs
- Information about the type of tenancy or licence
- A full and clear description of the premises, and information about fixtures and fittings
- Information about the respective maintenance and repair obligations of you and the POB
- Obligations in relation to the purchase of tied products and services
- Whether the tenancy may be assigned or sold, and relevant procedures for you and the POB
- The advice, support and assistance available to you during the tenancy or licence, circumstances when the POB may be willing to amend its standard terms, and the events which entitle you to seek the Market Rent Only option
- Responsibilities of the POB / you regarding insurance
- Arrangements for payment of rent and deposits
- Information about your obligations under Transfer of Undertakings (Protection of Employment) Regulations 2006
- Procedures for where you breach the tenancy or licence, or where the POB breaches the Code.
The full detail of information the POB must provide is in Schedule 1 to the Code.
3.3 Sustainable Business Plan
Before agreeing the renewal of the tenancy with you, the POB must make sure you have prepared a sustainable business plan.
Before you prepare the sustainable business plan, the POB must:
- Identify publicly available reports that:
- analyse the trading and tenancy costs of tied pubs in the UK
- provide relevant data against which you can compare the performance of the tied pub
- Either provide you with copies of these reports, or inform you of where and how they can be found
- Advise you to consult the reports identified.
Your sustainable business plan must:
Have been prepared after you have considered independent professional advice (such as business, legal, property and rental valuation advice)
Contain financial forecasts for the tenancy or licence period, including:
- Estimates of income and expenditure
- A sensitivity analysis
- The impact of any indexation of rent or other costs in the new agreement
- A forecast of reasonable and realistic income and net profit.
If you have any queries or concerns about the steps your POB is required to take or has taken when you are entering into a new agreement, you may wish to contact your POB’s Code Compliance Officer (CCO).
To find out more about the role of the CCO and for their contact details, please see our helpful factsheet.
If you have a dispute with your POB about whether it has complied with its duties under the Code, you may be able to refer the dispute to the PCA for arbitration. To make an arbitration referral to the PCA, please complete our Referral Form.
For more information about:
4. Questions about this factsheet
For general queries about the information in this factsheet, you may contact our enquiry service.
Please note, we can provide information about your rights, the Code and our processes. We cannot advise you about your case.
This factsheet provides information to support tenant understanding. It is not a substitute for the Pubs Code framework.
You may find it helpful to take independent professional advice before making any decisions that may affect you and your business.
5. Find out more
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