Tied pubs consultation closes on 17th January
MEMBERS of the Scottish licensed trade have until 17th January to submit their views on aspects of the upcoming Scottish Pubs Code.
A consultation on the Scottish Government website is seeking feedback on the sections of the Tied Pubs (Scotland) Act that will deal with market rent only (MRO) leases and guest beer agreements.
The consultation comes after MSPs voted the Tied Pubs Act into law in May 2021. The Scottish Government is now obliged to lay a pubs code before parliament by 5th May 2023.
The consultation page states that the Scottish Government “wishes to create an MRO lease process which is straightforward, flexible and easy to use”.
Participants are asked whether or not they agree with a number of proposals related to MRO leases, including whether they agree or disagree that various terms would be “unreasonable” to include in an MRO lease, such as break clauses only exercisable by the pub company, and a variety of costs and requirements deemed “more onerous” than in the tenant’s existing lease.
There are also various circumstances where pub companies would not be required to offer an MRO lease.
The consultation proposes an “investment exception”, where a pub company could be exempt from offering an MRO lease to a tenant for a period of either five or seven years. This would be contingent on the company agreeing, in writing, to invest a sum of £35,000 or 1.5 times the annual rent (whichever is greater) in order to qualify for an exemption for five years, and ten times the annual rent to secure an exemption for seven years.
Pub companies would also be exempt from offering an MRO lease during the first half of a tied tenancy (if the tenancy is longer than one year) or if the tenancy is less than 12 months.
Tenants would only be able to request an MRO lease at two-yearly intervals.
However, once an MRO lease was requested, pub companies would have to ensure it was offered within four weeks.
MSP Neil Bibby, who introduced the legislation to the Scottish Parliament, said after securing cross-party support for a pubs code “we now have to ensure that the code is appropriate and fair to pub tenants”.
“It’s important that the interests of publicans, small businesses and consumers are represented fairly,” said Bibby.
The full consultation can be found at consult.gov.scot