Scottish Pubs Code for tied pubs: consultation 3

Information for prospective tenants

15. The purpose of requiring pub-owning businesses to provide information to prospective tenants is to assist tenants in their assessment of the risks and rewards of tenancy (third regulatory principle) and to support them in assessing whether they are no worse off than if they were subject to neither a product tie nor a service tie (second regulatory principle)

16. We recognise that tenants and pub-owning business representatives had different views on regulation 10 of the Scottish Pubs Code which sets out what information should be provided to new or renewing tenants, with tenants tending to believe there should be at least the same or more information provided and the pub-owning businesses tending to believe the requirements are too onerous.

Publicly available reports

17. We consider the information requirements in regulation 10 to be proportionate but we propose to amend regulation 10(d)(v), for clarity.

18. Regulation 10(d)(v) requires that pub-owning businesses should provide prospective tenants with "any publicly available reports analysing the trade costs of tied pubs, including the costs of the agreements under which such pubs are occupied.". Such reports include benchmarking data produced by the British Beer and Pub Association^[4].

19. We propose that pub-owning businesses be required to provide at least one report (as opposed to any publicly available reports) analysing the trading costs of tied pubs in the UK, including the costs of the agreements under which such pubs are occupied. Pub-owning businesses could choose to provide more reports if they wished.

Question 9: Do you agree or disagree with the following statement: pub-owning businesses should be required to give tied pub tenants at least one publicly available report analysing the trade costs of tied pubs in the UK, as part of the information to be provided to prospective tenants?

Strongly agree

Agree

Neither agree nor disagree

Disagree

Strongly disagree

Please explain your answer

Question 10: What would be the impact on the sector?

Number of operators of a pub

20. The Scottish Pubs Code currently requires pub-owning businesses to provide information to new tenants on the number of tenants who have occupied the pub in the past ten years. It has been suggested that this provision should cover all operators of the pub in the past ten years, not only tenants. This would mean that the figure provided by the pub-owning business would include, for example, those operating under management agreements, and it would therefore better reflect the turnover of occupiers of the pub in recent years.

21. There are many reasons why people may join or leave tenancies, but widening the basis of the evidence provided would enhance the information available to the tenant about the recent occupiers of the pub. We therefore propose to require pub-owning businesses to provide information on the number of operators who have occupied a pub in the past 10 years.

Question 11: Do you agree or disagree with the following statement: pub-owning businesses should be required to provide information on the number of operators who have occupied a pub in the past ten years, as opposed to the number of tenants?

Strongly agree

Agree

Neither agree nor disagree

Disagree

Strongly disagree

Please explain your answer

Repairs and dilapidations

22. We heard in previous consultations that repairs and dilapidations are one of the most contentious and difficult parts of the tenant-landlord relationship. This remains an issue of concern for tenants who have advised that they can be required to pay for repairs at the start of their tenancy and for dilapidations at the end of their tenancy without having any control over the nature and level of the costs.

23. We recognise that leases will typically spell out how these matters are to be addressed. However, there is a role for Government in making sure that tenants are made aware of their obligations and to ensure there is fair and lawful treatment as tenancies change.

24. The key requirements in the code on repairs and dilapidations are set out below:

"Regulation 10(c) a copy of any dilapidation report prepared in respect of the lease covering the period of the previous tenancy of the tied pub, and

Regulation 10(d)information about—

(i) completed repairs undertaken on the tied pub covering the period of the previous tenancy

(ii)any repairs required to be carried out at the start of the lease by the tenant,

(iii) any repairs required to be carried out at the start of the lease by the pub-owning business."

25. We understand that provision of a Schedule of Condition is standard practice for the industry. In England and Wales, the Schedule of Condition is also taken into account during an assessment of any maintenance or repairs in respect of the premises and before any obligations or liabilities in respect of the condition of the premises are agreed between the pub-owning business and the tied pub tenant. The Schedule is also updated in line with the tenancy or following structural changes or 6 months before the end of the tenancy.

26. It is proposed that the Scottish Pubs Code includes a requirement for a Schedule of Condition to be provided, with similar protections as in England and Wales. This would provide reassurance to tenants about the terms of their proposed lease and the condition of the pub.

Question 12: Do you agree or disagree with the following statement: pub-owning businesses should be required by the code to provide a Schedule of Condition to prospective tenants?

Strongly agree

Agree

Neither agree nor disagree

Disagree

Strongly disagree

Please explain your answer

Question 13: Do you agree or disagree with the following statement: pub-owning businesses should be required by the code to provide a copy of the previous dilapidation report, if they are providing a Schedule of Condition?

Strongly agree

Agree

Neither agree nor disagree

Disagree

Strongly disagree

Please explain your answer

Question 14: Should pub-owning businesses be required by the code to provide:

a) information about completed repairs undertaken on the tied pub covering the period of the previous tenancy; or

b) information about repairs completed since the last dilapidations report?

They should be required to provide a) information about completed repairs undertaken on the tied pub covering the period of the previous tenancy

They should be required to provide b) information about repairs completed since the last dilapidations report

Don't know

Please explain your answer