Buying-out fines taken back by host
A lessee has clawed back nearly £4,000 in fines for buying out after her bank agreed the money was taken without authorisation.
NatWest agreed that the charges — taken by Enterprise Inns directly from the licensee's account — were unauthorised because the lease didn't explicitly state how penalties would be collected.
The case threatens the ability of pubcos to take penalties automatically from licensees for buying out.
It raises the prospect of licensees issuing retrospective claims for penalties. The MA understands a number of similar cases are due.
Lesley Auluk — who runs the Old Neighbourhood Inn, Chalford Hill, Gloucestershire, with husband Bally — admitted buying out over a two-year period.
On advice of surveyor David Morgan, they asked NatWest to refund £3,946 — which Bally said was taken without authorisation — via the direct debit guarantee scheme. The scheme allows money to be refunded if it's taken without permission. The amount was refunded to the couple on Tuesday and NatWest is to reclaim it from Enterprise at a later date.
Morgan said: "If the lease spells out that buying out attracts a fine or compensation and indicates exactly how the money owing is calculated, no problem.
"If there is no contract or lease understanding supporting the removal of monies from your rent account, then under the banks' direct debit guarantee scheme, if the withdrawal was unauthorised, you may have a clear case for recovering all of the money. Rough calculations indicate that the amount of fines/compensation in the past five years, might well exceed £40m."
NatWest said: "We are just following the rules of the direct debit scheme in this instance, which all the banks have to follow."
Bally said the couple were "caught between a rock and a hard place". Turnover roughly halved to £150,000 in the two years they've been at the pub. Rent is £44,000.
Enterprise is initiating proceedings to terminate the lease after the couple refused to pay another charge of just over £3,000 for buying out.
Enterprise chief operating officer Simon Townsend said the fines were "entirely justified and we are very comfortable with the strength of supporting evidence we retain in our files.
"In the event that the bank seeks to recover monies paid we would immediately commence further legal action against the lessees and, of course, seek to recover any costs incurred."
