BEC calls for more transparency in pub rent reviews

Thursday, May 14, 2009

The BEC has called for greater levels of transparency in the rent system of the pub industry.

Written by Alex Pennant

The Business and Enterprise Committee's (BEC's) report into the pub industry has called for greater transparency in rent reviews for pub lessees.

It found that the lessees were frequently at a disadvantage because the method used to calculate the amount payable was often subjective, reported the Publican.

Some 44 per cent of licensees polled in a BEC survey conducted by research firm CGA said they had not seen a breakdown of their rent calculations.

The report stated: "Without transparency, the valuation process is open to abuse and negotiating a fair rent becomes more difficult."

It added that calculation inputs could be manipulated by under-estimating the running costs of the establishment, which could result in the landlord getting more rent and the tenants making less profit.

Stephen Owens, head of rent review at Christie and Co, said the assessment must benefit the industry, tenants and pub companies.

Last month, pub tenants leasing from Punch, Admiral Taverns and Trust Inns all received a lower bill after the firms announced they would adjust rent review calculations to take into account the negative Retail Price Index Inflation rate, reported the Morning Advertiser.

Source: ask-re The Property People LLP