The 3 Year Tenancy
KEY TERMS APPLICABLE TO THE FULLER’S 3 YEAR TENANCY AGREEMENT
Length of Tenancy (Term)
- The Fuller Smith & Turner PLC (Fuller's) Three Year Tenancy Agreement will normally be granted for a term of three years. It is a three year renewable agreement and the tenancy can only be terminated on the giving of not less than six months notice prior to the end of the agreement.
- A premium is unlikely to be charged on the initial grant of a three year tenancy. However, a letting fee might apply. You should check at your interview if this is the case.
- The initial rent is based on market evidence at the time the tenancy is granted. The rent will be adjusted in line with the Retail Prices Index annually on the anniversary of the commencement date. There is a full rent review every three years.
- You are required to decorate the private quarters of the property, keep them in good repair and condition, and to renew or replace any items with modern equivalents as and when necessary. Fuller’s will be responsible for all external decorations and decorations to the trading areas of the outlet.
- Whilst Fuller’s is responsible for the majority of repairs to a tenanted property there are minor repairs and decorations you will be responsible for. On an annual basis our surveyor and your business development manager will visit and inspect the entire property. At that meeting a full survey of the building will be carried out. We will inspect any documents you are required to furnish us with (i.e. gas certificates, insurance) and check any repairs you were required to carry out as part of previous inspections. You will then be sent a notice identifying any documents or work that remain outstanding together with the time scales in which we expect them to be carried out. If you require help finding a contractor to carry out these works our surveyor will be pleased to assist you. A full list of your repairing liabilities can be found in the Tenancy Agreement
- Fuller’s insures the building against normal risks. This covers the normal risks of fire, flood and impact. Fuller’s pays for this service to be provided for you.
- Assignment (sale of your interest in the tenancy) is not permitted.
- You are not permitted to mortgage your interest in the tenancy.
- The agreement will have the benefit of the security of tenure provisions contained in the Landlord and Tenant Act 1954, which governs the circumstances for renewal of an agreement at the end of the initial term.
Inventory and Stock on Premises
- You will be required to purchase the trade inventory at the house together with the stock and sundry items.
- A security deposit equal to a quarter of the annualised rent will be required subject to a minimum of £8000. Interest will be payable on the sum deposited at a rate of 0.25% below the current Bank of England base rate. At the end of you’re agreement the deposit will be returned to you less any outstanding debts to Fuller's.
Fixtures and Fittings and Stock on Premises
- You are required to purchase the tenant’s fixtures and fittings at an agreed value. The tenant or lessee cannot remove the tenant’s fixtures and fittings from the premises and is required to keep it together with Fuller's inventory items in good repair throughout the term. The ownership of the landlord’s fixtures and fittings will remain with Fuller's throughout the tenancy or lease. You will also be required to purchase the stock, glassware and sundry catering equipment at the premises.
- There is a full tie on all wet products. Fuller's supplies goods on its normal terms of trading and at its standard wholesale price.
- When you take one of our pubs you will be allocated with a regular, weekly delivery day and an approximation of a time window in which the delivery will be made. In certain circumstances you may be allocated two delivery spots per week. If you require further deliveries in addition to those allocated you should be aware that these will incur courier costs in the majority of circumstances. Where the courier is necessary due to an error made by Fuller's we will pay the courier cost.
Flow Monitoring Equipment
- Fuller’s uses flow monitoring equipment in many of its pubs. The terms regarding the way we operate this equipment and the subsequent use of the data provided will be supplied to you as part of the interview procedure.
- Fuller’s retains the right to install all leisure machines. Currently, all Amusement with Prizes (AWP) and pool machine income is shared on a 50/50 basis after costs. Whilst other machines are permissible with our permission they must be supplied by one of our nominated suppliers. You should agree your own contractual terms with the supplier and be aware we receive a small royalty fee for each machine you install. Your AWP and pool machine income will not form part of the rental calculation. The machines will be normally be emptied by the operators on a weekly or fortnightly basis.
Contents and Third Party Risks Insurance
- The tenant or lessee is required to insure for loss/damage of contents, business interruption and third party risks at their own cost. This should include the trade fixtures and fittings, personal effects and public and employee liability.
- This will be clearly stated within the tenancy or lease and will normally be to run the house as a public house. This can be extended under certain conditions to catering and letting accommodation.
- Our consent is required for any external signing proposals or any change in the house name.
- It is absolutely prohibited to alter the structure of the building. However, Fuller’s will look favourably on granting permission for alterations that enhance the property. Non structural improvements, alterations or decorations require the consent of Fuller’s.
- The tenant or lessee is required to obtain all the necessary statutory approvals and furnish the landlord with a copy prior to any work commencing at the premises.
- Subletting of the whole or part of the premises is not permitted.
- Rates and Council Tax are the responsibility of the tenant or lessee.
Expiration of the Agreement
- The majority of our agreements are fully protected by the Security of Tenure provisions contained in Part 2 of the Landlord and Tenant Act 1954. You will be informed at the outset if this is not the case. Fuller's is entitled to serve a notice at least six months before the end of the tenancy or lease stating whether it requires possession of the property as a managed house or if it is prepared to negotiate with the tenant or lessee for a further term. We would again like to put your mind at rest and confirm that in nearly all cases we will wish to renew and at this stage will enter into the same negotiations as described in the rent review section of this brochure. If, however we wish to take the house back as a managed house you will be entitled to compensation at the statutory rate. In certain circumstances an agreement will be outside of the Landlord and Tenant Act. These normally allow six months notice on either side throughout the term. If it is our intention to end the agreement at expiration you will be notified at least six months in advance of the termination date.
- The various payments, which the tenant or lessee makes to the landlord under the lease, will each be subject to VAT at the standard rate applicable.