Moved by
Baroness Neville-Rolfe
89A: Clause 42, leave out Clause 42 and insert the following new Clause—
“Pubs Code: market rent option
(1) The Pubs Code must require pub-owning businesses to offer their tied pub tenants falling within section 67(1)(a) a market rent option in specified circumstances.
(2) A “market rent option” means the option for the tied pub tenant—
(a) to occupy the tied pub under a tenancy or licence which is MRO-compliant, and
(b) to pay the market rent in respect of that occupation.
(3) The Pubs Code may specify—
(a) circumstances in which a market rent option must or may be an option to occupy under a tenancy;
(b) circumstances in which a market rent option must or may be an option to occupy under a licence.
(4) A tenancy or licence is MRO-compliant if—
(a) taken together with any other contractual agreement entered into by the tied pub tenant with the pub-owning business in connection with the tenancy or licence it—
(i) contains such terms and conditions as may be required by virtue of subsection (5)(a),
(ii) does not contain any product or service tie other than one in respect of insurance in connection with the tied pub, and
(iii) does not contain any unreasonable terms or conditions, and
(b) it is not a tenancy at will.
(5) The Pubs Code may specify descriptions of terms and conditions—
(a) which are required to be contained in a tenancy or licence for it to be MRO-compliant;
(b) which are to be regarded as reasonable or unreasonable for the purposes of subsection (4).
(6) Provision made under subsection (1) may, in particular, require a pub-owning business to offer a tied pub tenant a market rent option—
(a) in connection with the renewal of any of the pub arrangements;
(b) in connection with a rent assessment or assessment of money payable by the tenant in lieu of rent;
(c) in connection with a significant increase in the price at which any product or service which is subject to a product or service tie is supplied to the tied pub tenant where the increase was not reasonably foreseeable—
(i) when the tenancy or licence was granted, or
(ii) if there has been an assessment of a kind mentioned in paragraph (b), when the last assessment was concluded;
(d) after a trigger event has occurred.
(7) The Pubs Code may specify what “renewal” means in relation to a tenancy or a licence for the purposes of subsection (6).
(8) In subsection (6) “pub arrangements”, in relation to a tied pub, means—
(a) the tenancy or licence under which the tied pub is occupied, and
(b) any other contractual agreement which contains an obligation by virtue of which condition D in section 65 is met in relation to the premises.
(9) In this Part a “trigger event”, in relation to a tied pub tenant, means an event which—
(a) is beyond the control of the tied pub tenant,
(b) was not reasonably foreseeable as mentioned in subsection (6)(c),
(c) has a significant impact on the level of trade that could reasonably be expected to be achieved at the tied pub, and
(d) is of a description specified in the Pubs Code.
(10) In this Part “market rent”, in relation to particular premises at any time, means the rent which the premises might reasonably be expected to fetch at that time in the open market, on the assumption that condition B in section 65 continues to be met.”