What is a Rent Assessment Proposal?

A pub lease will specify rent review dates. These are the dates when the landlord is able to carry out an assessment of the rent that the tenant must pay under the existing lease. These rent reviews are usually carried out on a market rent upward only basis. This means that on review the rent will either stay the same, or increase, depending on the local rental market.

A pub company must send a tenant a document called a Rent Assessment Proposal (RAP) at least 6 months before a rent review date. Receipt of a RAP is an MRO trigger event, which gives the tenant the right to request an MRO proposal from the landlord.

In certain circumstances, a tenant can request that the landlord carry out a rent assessment rather than wait for the next rent review date. These are as follows:

1. No rent assessment has been concluded in the last 5 years;
2. There has been a significant increase in the price of a tied product / tied service;
3. A trigger event has occurred which will have a significant impact on trade.

When issuing the tenant with a RAP the pub company must provide the following information:

1. The proposal for the new rent under the existing lease;
2. The information set out in Schedule 2 of the Pubs Code;
3. Any other information that the tenant may need to enter into informed negotiations.

The RAP should be provided with a statement by an RICS member or fellow which confirms that it has been prepared in line with RICS guidance.

The pub company is required to provide any further information that is reasonably requested by the tenant. The tied-tenant should also be advised to seek independent professional advice in relation to the proposed rent.

If you feel that your landlord has not complied with their obligations under the Pubs Code, you should first notify the pub company of their non-compliance. If you do not receive a satisfactory response within 21 days, you have the right to make a referral to the PCA for arbitration. Pubhelp is able to assist in the referral process if required.