Pubs code delayed as market rents only loophole is uncovered

05 May 2016 by
Pubs code delayed as market rents only loophole is uncovered

The long-awaited Pubs Code, which was supposed to be ready by 26 May, has been delayed after a loophole in the markets rents only (MRO) option of the legislation was uncovered.

The department for Business, Innovation and Skills (BIS) has confirmed the code will not be ready for the promised deadline, after business minister Anna Soubry held a meeting with key stakeholders today (5 May) to explain the delay.

It is thought that as many as half the tenants would have been ineligible for the MRO option as a result of the loophole.

The code will now be altered and the Government will address the "technical drafting issues" with the regulations "as soon as possible".

The regulations concern protected and unprotected tenancies and the latter's right to MRO, which would allow tenants to request that ties be cut with breweries and pubcos to just the market rent of the building.

The current draft offers tenants the right to trigger a review for a market rent only agreement if the price of beer supplied rises by 3% above the Producer Price Index.

Last month the BBPA slammed the proposals in the Pubs Code as "unworkable" and warned they would lead to further pub closures. The delay is not believed to be connected to the concerns of the BBPA.

The British Pub Confederation has called on the six large pub companies to honour the original start date of 26 May, allowing all tenants with rent reviews from that day the right to MRO.

As yet, it is not known how long the Pubs Code will be delayed by.

BBPA slams Pubs Code as unworkable >>

Government publishes first draft of Pubs Code for consultation >>

Government unveils new statutory pub code >>

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