PCA works with pub companies to enhance the new tenant experience

The Pub Code imposes responsibilities on pub companies when dealing with new and potential tenants. This requires the pub company to provide a range of information so that tenants are fully aware of what the agreement entails and their obligations. The pub company should advise tenants to obtain independent advice on this information, including the tenancy offer, before preparing their sustainable business plan. He should also advise new tenants to undergo training before moving in (if they have no experience).

The Government’s latest review of the Pubs Code (2016-2019) found some concerns about whether tenants were receiving and fully understanding information from their pubs as required by the Code. The Government has also recognized the importance of new bonded tenants having access to good advice and a full understanding of their Code rights.

The PCA has initiated ongoing discussions with pub representatives responsible for compliance with the company’s code to explore the experiences of new and potential tenants and where improvements can be made.

Since then, the following work has been carried out in collaboration with the code compliance officers of all six regulated pub companies:

Information and training for new tenants

When renting, tenants receive a wealth of information. Much of this will be required by the Code (under Schedule 1) and although our recent annual tenant survey found that 83% found the information useful, it can be difficult to digest.

The code also requires new entrants to undergo pub entry training designed to raise awareness of issues related to running a pub and entering into product links and other agreements with landlords. Training is currently provided by the British Hospitality Institute (BII) through their Pre-Entry Course (PEAT).

Code compliance officers, in consultation with the PCA, have reviewed how they provide information to new tenants, including about the Code, and how they will measure how well it is working. This includes ensuring proper entry training is provided to pubs when this is provided by a third party, as well as their own training for the induction of new tenants.

Professional advice

BII facilitated the creation of industry expert groups (certified valuers, lawyers and accountants). Panels have been created to support BII members with important life cycle events related to deals, investments and business cases by referring them to independent accredited advisors. Following engagement with the PCA, the BII has supported the effectiveness of the Code by ensuring that its new teams of accredited advisors for new tenants of all regulated pub companies are also available to prospective tenants who are entitled to information under the Code when negotiating their tenancy. Most pub companies also pay for ongoing BII membership for their associated tenants. The PCA is pleased to see this, recognizing the importance of quality advice for tenants.

Stephen Alton, CEO of the British Hospitality Institute (BII), commented: “Access to independent expert support is vital for both new and existing tenants. Thanks to our accredited advisers and extensive professional services, we are able to fully support our members with access to the highest level of professional, independent tenant support, both prospective tenants before formal agreement and existing tenants when changes to agreements occur. This ensures that they get the very best commercial platform on which to grow their business.”

Code awareness

All new and prospective tenants now receive a letter from the PCA through their pub company informing them of their rights under the Code. Related tenants told us in our independent research that they want personal contact with the PCA at the start of their tenancy. Our aim is to continue to increase tenant awareness of the Pub Code, with 79% of tenants now aware, up 7% from the last survey in 2019.

Using a sustainable business plan

The PCA is in ongoing discussions with code enforcement officers, who have agreed to review their arrangements for regular reviews of the sustainable business plan that a related tenant must prepare, based on professional advice, before taking up a tenancy. This is to ensure that it is updated as necessary and remains a useful basis for discussion and decision-making. The quality assurance of this review is ongoing.

Additional information

To find out about a pub company’s obligations to new tenants, see the PCA information sheet available on our website here.

Full results of the PCA-related tenant survey can be found on our website here.