Sources of conflict when a tenancy ends

Following on from my article on landlord and tenant relationships last week, there is

another area which, if anything, is the most damaging aspect of all and is thoroughly in need of reform.

I have lost count of the number of communications I have received from tenants and lessees in despair over their deposit/fixtures and fittings. At the end of the term, or on assignment or reversion, the amount of money deducted or not returned has enraged hundreds if not thousands of licensees.

Obviously, on entering into a lease, the last thing on the applicant's mind is the end of the relationship.

In fact, it is often felt that raising such issues will sour the relationship from the outset. It might well be that the operating companies rely on such British reticence to avoid difficult questions and to cover over what at the end will be a very messy affair, one which often leaves the tenant seriously out of pocket.

All leases, quite rightly, make provision for dilapidations - the dictionary definition being "damage done to a building during tenancy". A deposit is asked from incomers to be held against such damage, so that the landlord himself is not financially prejudiced.

The perennial problem seems to be in assessing not only what is covered, but also the extent of the lessening in value caused by the occupation. Tenants do not deliberately set out to damage the landlord's property, of course, but neglect and lack of repair can be equally injurious.

It must be remembered that one improvement does not offset these costs. Improvements to a pub become the property of the landlord and there can be no horse-trading on expenditure, in spite of the wailings of numerous lessees to me that they have spent thousands and still lose the bulk of

their deposit.

Clearly, I get only one side of the story in most cases, from the complaining lessee. On the occasions when I contact the operating companies, I get a different view.

But it remains one of the least satisfactory aspects of the trade, because it is so very adversarial, pitching one side against the other in heated argument.

The problem is that the operating company/brewery holds the money. They can release as much as they think fit, or none at all, and challenge the tenant to go to the law to get their money back, safe in the knowledge that few, if any, will do so.

To this, add fixtures and fittings. The long-standing "F&F" tradition is based on the assumption that there is some value in the tools of the trade, which is separate from the lease or tenancy itself. But it is an entirely fictitious valuation in many cases, principally because the fixtures and fittings, in truth, belong to the landlord unless they can reasonably be removed without damage to the property.

My view is that if you are taking over a pub it should be a pub, which means that it should be kitted out as such, otherwise it is an extended sitting room or village hall!

I think the licensed trade should start to get real about both these issues. I would like to see a scheme set up similar to the one now beginning to operate in the domestic market, for a tenants' deposit scheme, where the deposit cash is paid to an independent holder who is then in a position to arbitrate impartially at the end of the term, and deduct what is felt reasonable from the money paid.

Of course, the landlords would not like it, because without doubt the cash they receive is a welcome bonus. But tenants would at least feel that they had a fairer deal and that someone else was entering this rather discredited negotiation to ensure fair play.