why pub tenants should seek building consultancy

Why Pub Tenants Should Seek Building Consultancy

For some reason pub tenants are typically reluctant to seek advice, but in doing so they don’t take advantage of opportunities that come their way. Getting professional building consultancy can give drinking property tenants a lot of benefits.

One of these is better understanding how the Market Rent Only (MRO) can positively affect their business. The MRO legislation that came into effect in July 2016 allows drinking property tenants in England and Wales to cut ties with their landlords. This relieves them of obligations that they may currently be under, most importantly, to do with rent payments and product orders.

If tied to their landlord, drinking properties are under an obligation to pay a certain level of rent to the pub company, regardless of the level of income the pub receives. They are also required to buy the majority of their beer from a particular pub company or brewery.

 

Our Advice to Pub Tenants

Although seeking professional advice may be alien to your way of thinking, the MRO legislation is having a big impact on the industry. So it’s best to seek building consultancy so you know the advantages and disadvantages of MRO and what it means to be free of a tied arrangement with your landlord.

Pub tenants whose rent review or lease renewal falls after the introduction of the code should definitely consider requesting an MRO option. Key things to consider in opting for an MRO:

How much is my market rent on a free of tie basis?
What are the financial benefits of being able to purchase products free of tie?
What is the value of my leasehold commercial property vs the free of tie arrangement?
What issues or challenges could arise as a result of the MRO option?
How do the potential positive gains measure up?

A professional advisor can often secure a better deal at rent review or lease renewal, sometimes in the vicinity of £3,000 per annum. This is a £15,000 saving over a five-year review. The fee charged by the advisor is often a small, insignificant charge compared with the savings to be had, ask your local commercial estate agent as they might be able to provide this service.

 

If you would like some personal advice or you would like to list your drinking property with us, give our expert team a call on 020 8800 4321

 

Sign-up to our monthly newsletter to keep up to date with the property market and the latest news. 

Name:
Email:

We respect your email privacy and you can unsubscribe anytime.

More Recent Posts

How to Negotiate a Commercial Lease

How to Negotiate a Commercial Lease

If you’re looking for a new business location, it’s important to know how to negotiate a commercial lease. If you...
Read More
Why Invest in Commercial Investment Property

Why Invest in Commercial Investment Property

There are a lot of benefits to buying commercial property as an asset class. Investing in commercial property, either buildings...
Read More
Commercial Investment Property Activity

Commercial Investment Property Activity

The pandemic continues to affect commercial investment property activity in the UK with levels remaining below typical for the time...
Read More
Go to bottom