MyShout

There are a lot of "political soundbites" about improving the lot of the small businessman when it comes to negotiating with the big property companies over rent reviews and lease renewals.

The property industry has recently strengthened the Code of Practice for Commercial Leases. Now supported by most property and business organisations, the code sets out what a lease should contain by way of rent reviews, subletting, break clauses etc.

The BII is forming a benchmarking scheme. This will check that "approved" leases are clear and concise in the way they set out the tenants rights and responsibilities, as well as the obligations of the landlords.

Yet when it comes to grass roots this is of little help to the individual licensee. I am acting for a widow who has an Inntrepreneur lease that came to an end in August 2005. A different pubco now owns the property. They wanted her to sign one of their own forms of lease which was very different. After 12 months of negotiating we got them to concede she can keep the same type of lease as she already has, but we cannot get them to even talk about the new rent and barrelage discounts. She could make the pace by applying for court dates but she cannot afford this and frankly doesn't see why she should be put to the expense.

In two other cases I have been appointed as arbitrator in rent review "disputes". But the tenants tell me there is no dispute. The landlords have yet to discuss matters with them. The tenants feel that the cost of arbitration is being used as a lever to make them pay increased rents or substantial fees for the arbitration. Neither tenant is professionally represented and I find I am spending quite a lot of time explaining to them their rights and obligations.

This problem is not restricted to pubcos. I also handle a lot of restaurant rent reviews and in the past couple of months I have dealt with three cases where the dispute referred to me for resolution has seen the tenant unable to afford professional representation. This generally means the cost of the arbitration is escalated because I spend more time ensuring the tenant gets a fair hearing.

What is the answer? I don't believe that increased legislation is ever the answer. Most "small businesses" want disputes resolved quickly and without too much expense. Perhaps pubcos and property companies should have systems in place where their tenants can appeal to a higher level of management if they do not get adequate response within a certain time frame. I know the Vanguard lease organisation had this before it was subsumed into Punch and it certainly instilled a degree of urgency into the responses given by those on the lower rungs of management.

I also believe there should be a cheaper and quicker dispute resolution system. The independent expert fixed-price scheme run by Inntrepreneur was again a superior idea that got lost in takeovers.

Pubcos want the best tenants and to boast of fine relationships with their lessees. But there are some obvious flaws which could be remedied with just a little thought and very little cash. And certainly no new laws.