Changes to Pubs Code to come into force next week

Changes to the Pubs Code will come into force from 1 April, including to the time limits for Market Rent Only (MRO) negotiation, arbitration and Independent Assessor referrals.

The Pubs Code Adjudicator (PCA) will be publishing more information over the coming weeks, however a summary of the changes published by the government has confirmed this will include an updated MRO procedure involving a longer period to negotiate before the deadline to make a referral for arbitration in relation to any dispute about the compliance of the MRO terms.

From 1 April 2022, the 21-day period in which the tied tenant must send their MRO notice to the pub company will start the day after the MRO event, instead of on the day.

The pub company must send an offer for the amount of rent payable as part of the MRO proposal. If it does not, the tied tenant has 14 days starting the day after they receive the MRO proposal to make an arbitration referral to the PCA.

If the pub company disagrees there has been an MRO event, the tied tenant has 14 days from receiving that response to make an arbitration referral to the PCA.

If the pub company fails to send any response, the tied tenant has 14 days from the end of the 28-day period of response to make an arbitration referral to the PCA.

A tied tenant who receives an MRO proposal will have a three-month resolution period to consider the proposal and negotiate with the pub company about the terms and rent.

Within seven days of the resolution period ending, the pub company can send an updated MRO proposal to reflect the negotiations.

The tied tenant can end the resolution period earlier than three months after receiving the MRO proposal by giving the pub company seven days’ notice. But the resolution period must last for at least 21 days.

The tied tenant has 21 days after the end of the updated period of response to refer the pub company’s proposal to the PCA for arbitration if they do not consider the terms are MRO-compliant, and refer any dispute about the MRO rent to an Independent Assessor.

A tied tenant may request MRO and/or a rent assessment if there is a significant increase in the price of tied products or services. For invoices received 1 April 2022 onwards, the ‘comparison period’ will change so that the periods being compared when determining whether there has been a significant increase in price will be 12 months apart instead of 13.

From 1 April, when a pub company sells a tied pub it must give details to the PCA of who it has sold the tied pub to.

The period for which a company must own 500 or more tied pubs in the previous financial year to become regulated and have to comply with the code is also being reduced from six to three months.

Photo: Shutterstock / Eugenevortep