The Campaign for Pubs has written to the Business, Energy, and Industrial Strategy (BEIS) select committee, urging it to investigate the endemic use of hostile Section 25 eviction notices by regulated pub-owning companies.
The letter, from campaign chair Paul Crossman, details the way in which the notices are now regularly used in order to take pubs back from good-quality, long-term tenants, and to remove their pubs from the scope of Pubs Code protection in the process.
It makes reference to the high-profile current case of The Britons Protection pub in Manchester, where the long-standing tenant is fighting eviction from his unique and iconic pub by owners Star Pubs and Bars, pub operating arm of brewing giants Heineken.
It warns that the regulated pub companies have been given the time to restructure their operations in such a way as to game and avoid the spirit and intent of the Pubs Code regulations, which came into effect in 2016. The code was intended to address the chronic imbalance of risk and reward that had come to characterise the tied tenanted model of pub operation.
Four successive business committees flagged the failings of the tied model since 2008, says the campaign, and their critical reports were instrumental in securing the statutory regulation that eventually came into effect.
The Campaign for Pubs is now urging the current BEIS committee to consider how that legislation is now being openly gamed and avoided by the cynical (mis)use of Section 25 notices. It condemns the way that these companies can so easily abuse the spirit of one Act — The Landlords and Tenant (L&T) Act — to negate their own legal responsibilities and the rights of their tenants under another — The Pubs Code regulations of the Small Business and Enterprise Act.
Mr Crossman is highly critical of the Pubs Code adjudicator’s (PCA) office for failing to address the growing problem of hostile Section 25 notices, as well as the fact that the regulated companies were openly developing new business models which were clearly designed to allow them to evade the Pubs Code regulations that the PCA is supposed to uphold and enforce.
The letter points out that certain pub companies have developed a new ‘quasi-managed’ form of tenancy which they are attempting to pass off as a management scenario in order to justify a claim for occupation. However, the new ‘manager’ is not directly employed by the pub company and receives none of the benefits and securities to which a genuine employee would be entitled. Instead, they are a self-employed person with their own tax liability, and responsibility for employing their own team.
The letter questions the validity of this new type of tenancy when it comes to justifying a hostile Section 25 notice. It argues that these models may fail to meet the legal criteria that would reasonably enable a pub-owning company to claim that a pub is being taken back under Grounds G of Section 25 of the L&T Act because it is the “landlord’s intention to occupy the holding for his own business or as a residence”.
The letter likens these quasi-managed agreements to ‘Uber’ pubs. It urges the committee to scrutinise such deals and to press for their efficacy to be assessed. It points out that these quasi-managed deals have been openly developed over time, under the very nose of the PCA and BEIS Dept.
The PCA has a duty to report problems and issues with the Pubs Code back to the Secretary of State at BEIS, yet the letter points out that no apparent action has been taken regarding either hostile Section 25 notices or code-avoiding quasi-management models, despite repeated efforts by campaigners to raise the alarm.
Mr Crossman states that the use of hostile Section 25 notices has become commonplace in the industry since the introduction of the Pubs Code, and cites his own experience of having to contest such a notice from Punch Taverns in 2017.
Meanwhile, in Manchester, a campaign is currently building around The Britons Protection since it was served a hostile Section 25 notice by Star Pubs and Bars. There is outrage locally that the long-serving tenant should now face eviction through no fault of his own from the successful, unspoilt and highly idiosyncratic pub of which he has been a careful steward for ten years. The tenant, Mark West, is preparing to take the matter to court in a legal test case.
Enjoying a pint of great beer 