New rules unveiled by the Liberal Democrats will help pub tenants battling to pay rent or beer costs in Bermondsey and Southwark. Landlords tied to large pub companies have said they are struggling to make a decent living, with more than half claiming they earn less than the minimum wage.
The Government will give landlords the right to request a rent review after five years, as well as set up an independent adjudicator with the power to resolve disputes.
Commenting on the changes, Simon Hughes, Member of Parliament for Bermondsey and Old Southwark said:
“Far too many landlords feel their income is squeezed by big pub companies. So Liberal Democrats in the Coalition government are taking action to make sure they get a fairer deal.
“The introduction of a statutory code will make sure tied tenants get an accurate assessment of how better off they could be. Meanwhile, the new independent adjudicator will make sure pub companies are forced to act to sort out the situation if they are not behaving responsibly.”
Under the reforms announced today:
- All tied tenants will be given the power to request a rent review if they have not had one for five years.
- For the first time, tied tenants will also have the right to review the information pub owning companies have used to decide to increase rents. This greater transparency will allow tenants to see what information their landlord has used in calculating the rent, and decide whether an increase is fair.
- There will be additional protection for tied tenants whose pub owning company owns 500 or more tied pubs. If they cannot agree a tied rent with their pub company, these tenants will have the right to request a ‘parallel free-of-tie rent assessment’ to show whether they are worse off than their free-of-tie counterparts. Having this information will give tenants the information they need to negotiate a better, fairer deal with their pub company.
- Tied tenants will have the right to choose whether to be tied for gaming machines.
- Tied tenants will be able to report breaches of the code to a new independent adjudicator who will also arbitrate on rent disputes. The adjudicator will have the power to provide redress where the code has been breached. The adjudicator will also be able to launch investigations into allegations of systemic breaches of the code and to impose sanctions – including financial penalties – if it finds the code has been breached.