Ex-licensees warned over reassigned leases
Thousands of ex-licensees could face legal action from pub companies for reassigning their leases to unsuccessful tenants.
The issue has been raised after Susan Kennard, a PA from Chessington, contacted The Publican saying she is currently being pursued for the sum of £64,658.32 plus costs and interest by Wellington Pub Company.
She says she is facing bankruptcy and the loss of her home because her name was jointly on the lease for 18 months between 2000 to 2002 at the Red Lion in Thames Ditton, Surrey, with her now ex-husband.
Many lease agreements issued before 1996 allow the pubs' owners to pursue all previous tenants for any financial failures but the Landlord and Tenant (Covenant) Act 1995 changed this policy and now only the one previous tenant can be liable.
However, thousands of licensees across the country with older lease agreements could find themselves hit with large financial costs if their pub companies decide to pursue them after they assign their leases to unsuccessful tenants.
Ms Kennard said: "I now find myself in an impossible situation - I am a single person trying to defend myself against a large company to try to keep what I have worked hard for all my life.
"I just haven't got that sort of money. I could lose everything and there is nothing I can do about it."
Geraint Thomas, a partner at Laytons solicitors who has recently been appointed by Ms Kennard, said: "The right to claim from an ex-tenant has been abolished for new leases for good policy reasons, and it is disappointing that despite Ms Kennard's peripheral relationship with the Red Lion, her landlord is determined to pursue her. We are looking at all her legal options."
Keith Miller, specialist property lawyer at Joelson Wilson, has warned licensees to be careful who they assign their leases to.
He said: "When you assign a lease you guarantee that your buyer will pay the rent and obey the covenants."
Neil Griffiths, property and strategy director at Punch Taverns, said it advises licensees at assignment to take full legal advice. The pub company allows its tenants to buy themselves out of this contractual obligation at reassignment.
He said: "We fully review the opportunity of recovering debt and if we think it will be a case of hardship we would waive that. Because we are pro-active on assignments we do not have a high number of these cases."
Due to the terms of these lease agreements the pub owning companies are within their rights to claim back these losses. Licensees are advised to take independent legal advice whenever assigning a lease especially those drafted before 1996.
Wellington Pub Company declined to comment.
