Marston’s tenant wishing to go free of tie is served with huge dilapidations bill

In a video produced by the newly formed Forum of British Pubs, landlady Linda from the Queens Arms in Bakewell shares her story.

In an all too familiar tale, Linda explains how she took over a badly run down pub site with Marston’s over 15 years’ ago. Before signing the lease she had the foresight to undertake a survey, which highlighted a number of defects with the building, such as with the external wall.

Linda initially invested £50,000 into the site, and has continued to invest heavily over the years, with the total well exceeding £100,000. The site has clearly been well run, as reflected by the positive customer feedback online.

After 15 years as a tied tenant earning Marston’s a great deal of profit on their beer, she decided to exercise her right to go free of tie. Marston’s have now served a schedule of dilapidations bill exceeding £70,000, requiring her to rebuild the external wall that has been an issue since long before she took on the site. The building itself is Grade II listed.

Marston’s had not mentioned any dilapidations previously, until Linda sought to become a free of tie tenant. Linda also recalls how she felt pressured into signing the lease, and has received negligible support from Marston’s over the years.

Adversarial weapon

This is not the first time a pub owning businesses has sought to use the dilapidations as a pressure point to prevent tied pub tenants from becoming free of tie.

In a published award dated 2 February 2018 against Heineken owned Star Pubs & Bars, the Pubs Code Adjudicator (PCA) made the following ruling in relation to the serving of a dilapidations schedule:

“There can be no real doubt that, when the cost of dilapidations is high, the requirement for their immediate or short term payment may represent a real disincentive to a TPT to take the MRO option.

A reasonable landlord [pub owning business] should manage its estate responsibly throughout the term. The landlord should not be using surprises on the request for an MRO option as an adversarial weapon.”

In other words, the dilapidations should not be sprung upon a tenant in return for seeking a MRO agreement – as it is clearly a tactic used to prevent the breaking of the lucrative beer tie.