2.1 The Independent Expert valuer s charges will be in accordance with the following table. VAT will require adding to the charges quoted here.
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1 Introduction 1.1 The ALMR, BII, BBPA, GMV and FLVA have been approached by both landlords and licensed property tenants to put into place an efficient, equitable but cost effective means of obtaining the resolution of any licensed property rent review dispute. The Pubs Independent Rent Review Scheme has been established to address this issue 1.2 Whilst it is acknowledged that the owners of the premises involved are usually a Brewery or a Pub Company they are referred, for ease of reference, within what follows to simply as the landlord. Tenants or lessees are referred to simply as the tenant. The landlord and the tenant are jointly referred to as the parties. 1.3 Where the parties fail to agree on a reviewed rental, the method of resolving the dispute by way of referral to an Independent valuer or an Arbitrator, as provided for within the wording of a Lease or Tenancy Agreement, is often costly and time consuming. This can affect the tenant in particular. The PIRRS seeks to remedy this situation. 1.4 There are also some concerns amongst tenants who have been reluctant to accept the appointment of an Independent valuer or Arbitrator suggested by their landlords to deal with a rent review dispute. The appointment of an Independent valuer by the PIRRS as a neutral organisation, acts to allay these fears. 1.5 It is the PIRRS s recommendation that the parties to the PIRRS are professionally represented. Where, however, a party or parties is/are satisfied they have the appropriate rent review experience or expertise to represent themselves, those not wishing to appoint a professional advisor will under the PIRRS be able to conduct their own case. 1.6 By agreeing for a rent review to be dealt with under the terms of the PIRRS the parties are agreeing to be legally bound by the chosen PIRRS Independent Expert valuer s rental determination. The rental determination will become the reviewed rental figure, which will be final and binding on both the parties. 1.7 The position of the PIRRS in this matter is purely as an intermediary appointment body. Neither the PIRRS Board members nor any members of the PIRRS staff can accept any liability for the conduct of the matter once the appointment has been made, or for the amount of the rental determined. The contract for resolving the dispute is directly between the parties and the appointed Independent Expert valuer The PIRRS will be put into place by the parties entering into a formal agreement to substitute the procedure in the relevant Lease or Tenancy Agreement. This Agreement is known as a Deed of Variation (varying as it does for this one rent review only the dispute resolution clauses in the relevant Lease/Tenancy Agreement). Once this has been signed the parties are, unless they both subsequently agree in writing to the contrary, legally committed to proceeding with the PIRRS. 1.9 An application to participate in the scheme is then made separately by the landlord and the tenant to the PIRRS team. Upon receipt of the accurately
2 completed paperwork, including the signed Deed of Variation from both parties, the PIRRS team will issue the paperwork for the appointment of the Independent Expert valuer selected by the tenant to deal with the rent review dispute, in accordance with the procedures set out in this document Any communications with the Independent Expert valuer are to be in writing with a copy of such communication being forwarded without fail and without delay to the other side The Independent Expert valuer will, promptly following his/her appointment, write to the parties to confirm this to them and set out the procedure to be adopted to include reference to an appropriate timetable for the lodging of the parties Statement of Agreed Facts (if applicable), their Statements of Case and their Responses The matter in dispute relates solely to the rental value of the property. The Independent Expert valuer will proceed on the assumption that there are no disputes between the parties as to the correctness or otherwise of the service of any notice or notification required under the terms of the Lease or Tenancy Agreement in connection with rent review procedure. The Independent Expert valuer will assume that there are no disputes of any nature, legal or otherwise, which may be outstanding between the parties and which are relevant to the determination of the rental value In these proceedings it is essential that the parties each behave in all matters with complete honesty, integrity and sincerity. The Independent Expert valuer is entitled to expect honesty and truth free from any exaggeration in respect of all statements made to him by both the parties Unless the Independent Expert valuer is advised to the contrary it will be assumed, unless specifically advised to the contrary, that any professional representatives appointed by the parties will act as Experts and not as Advocates. The parties and their representatives should include a Statement of Truth within any Statement or Response they place before the Independent Expert valuer and Chartered Surveyors should include a statement confirming their compliance with the appropriate Practice Statement of RICS. It should be clearly understood that the primary duty of an Expert representing one of the parties is to the Independent Expert valuer, that the expert evidence provided must represent their Independent unbiased opinion falling from their experience and expertise and must be impartial and uninfluenced by the party instructing or paying the representative. An Advocate s role is distinct from that of an expert witness. Statements made by an advocate are seen as representing Submissions, and cannot be construed as expert witness opinion. An advocate is advocating and arguing an outcome for his or her client, and so his or her own opinion on any issue is irrelevant. Whilst an advocate owes duties to his/her client he/she also owes a duty to the Independent Expert valuer to act properly and fairly and to assist in the maintenance of the integrity of the Independent valuer process. Neither side must engage in discreditable behaviour, or behaviour prejudicial to the independent valuer process.
3 2 The Cost 2.1 The Independent Expert valuer s charges will be in accordance with the following table. VAT will require adding to the charges quoted here. Fees for PIRRS entered into between 1 st October 2009 and 30 th September 2010:- All prices are exclusive of VAT London Side of M25 England & Wales Outside M25 Passing Rent* Under 25,000 p.a. Landlord 2,500 Tenant 1,500 Landlord 2,000 Tenant 1,000 Passing Rent* Over 25,000 p.a. Landlord 2,000 Tenant 2,000 Landlord 1,500 Tenant 1,500 * The fee is based upon the pre rent review annual rent fee p.a. when entering into the PIRRS (the passing rent ). Not on the PIRRS rental determination figure. 2.2 All charges quoted are inclusive of the Independent valuer s out of pocket expenses. 3 The Landlord s Initial Responsibilities 3.1 The landlord will immediately upon being notified of the appointment provide the Independent Expert valuer with the following. All legal documents should be copies of the signed and completed agreements and not draft copies. :- a a copy of the Deed of Variation document referred to in paragraph 1.8 above. b c d e a copy of the relevant Lease or Tenancy Agreement a copy of all other relevant legal documentation (e.g. any Deed of Variation, Deed of Assignment, Licence for Alterations, Machine Agreement etc.) a copy of any Code of Practice, Charter or similar document the landlord is committed to in the rent review proceedings. a copy of the landlord s price list concerning tied products current at the relevant rent review date. This should clearly identify any applicable discount structure.
4 The landlord will also without delay forward a copy of these documents to the tenant who must advise the Independent valuer in writing within seven days should he/she consider that such documentation is incorrect or incomplete, with a copy of the relevant letter also being sent to the landlord. 3.2 The landlord will supply to the Independent valuer any information required in order to comply with their obligations under their Code of Practice or Charter as may be applicable. The landlord will also confirm in writing to the Independent valuer, copy to the tenant, any issues within their Code of Practice or Charter that are specifically relevant to the Rental Determination. 3.3 The landlord will comply with the above obligations within the time frame required by the Independent valuer. 4. Both Parties Responsibilities 4.1 Both parties will immediately, on the Independent Expert Valuer requesting them so to do, forward the appropriate remittance representing their share of the Independent valuer s charges to include VAT (the Independent valuer will subsequently provide each with a receipted VAT invoice). 4.2 The matter will proceed by way of Written Statements and Written Responses prepared by or on behalf of the parties and submitted in accordance with timetable advised by the Independent Expert valuer. 4.3 The parties will also endeavour to provide a joint document setting out a Statement of agreed relevant facts and other matters on which they are able to agree. This will not exceed six pages of A4 text utilising a minimum font size of 10 pt. The Independent valuer will be entitled to rely on this joint document and will be under no obligation to verify the information included further. The parties will not be required to repeat this information in their separate Written Statements. The joint document is to be submitted to the Independent valuer with numbered sections and paragraphs. Improvements carried out by the tenant which should be disregarded at rent review (these would usually relate to cases where the tenant has received formal written consent to improvements carried out by him/her other than as a contractual responsibility to the landlord) should be referred to in the joint document. Where there is any dispute on this point it should be clearly identified and documentary proof furnished concerning the landlord having approved such Improvements. It should be clearly understood that the Independent Expert Valuer has no power to deal with a point of law as part of the PIRRS procedure. 4.4 The parties Written Statements should be limited to dealing with issues in dispute in relation to the rental value of the property. These Written
5 Statements must be submitted in duplicate with numbered sections and paragraphs. 4.5 The Written Statements will not exceed ten pages of A4 text utilising a minimum font size of 10 pt. 4.6 The parties may each offer up to the Independent valuer either within their Written Statements or their Statement of Agreed Facts details of rent review comparables of other licensed properties they believe support their opinion of rental value and the reasons for this. Appendices may be used to provide confirmation of evidence forms from a party who has had a direct involvement with a comparable property, and such Appendices may be included over and above the page restrictions of the Written Statements. 4.7 The Independent Expert valuer will be under no specific obligation to visit or inspect the comparable properties. He/She will utilise his/her own discretion on this point. 4.8 The parties may also provide within their Written Statement any or all of the following:- Details of the fair maintainable trade and the resultant profits they would expect the hypothetical reasonably efficient operator would achieve from the premises Details of the overheads they would expect the hypothetical reasonably efficient tenant to incur during a typical year A tenant may supply accounts, stock takers reports or management accounts although he/she is under no legal obligation to do this (unless the Lease or Tenancy Agreement says otherwise) Details of the tenant s wet price list relevant at the rent review date along with a sample menu and wine list where appropriate Details of the machines in place at the premises as at the rent review date and confirmation of the basis on which the tenant receives machine income Evidence as to under or over-performance by the tenant in possession of the premises Evidence of any factors which have inhibited the performance of the premises e.g. road closure, redundancies, compulsory purchase, movement of working and resident populations Evidence as to how the tenant has maximised the opportunity within the business Analysis of comparable transactions by reference to trading potential and the adoption of the profits test method of valuation 4.9 No reference shall be made to any earlier correspondence or discussions which could be classified as having been made or effected on a without prejudice basis. The term without prejudice means that statements or offers have been made between the parties within negotiations genuinely aimed at achieving a settlement of the rent review The parties contentions must not contain any legal argument and the Independent valuer will not have the power to determine any points of law. If there are disputes of a legal nature the Independent valuer may cease proceedings until these have been clarified.
6 4.11 The Independent valuer will exchange the parties Written Statements between them and invite Written Responses within a specified timescale. Such Written Responses are to be restricted to comments upon matters raised in the other party s Written Statement. Under no circumstances is new evidence or information to be included in the Written Response. The Written Responses will not exceed five sides of A4 text utilising a minimum font size of 10 pt. The Written Responses must be submitted in duplicate with numbered sections and paragraphs, and must be appropriately referenced in referring to the other party s Written Statement. 5 The Independent Valuer s Inspection 5.1 The Independent valuer will advise the parties as to when he/she will carry out his/her inspection of the property. Whilst co-operation is essential the Independent valuer will have regard to any legitimate requests to change the inspection date if this proves to be genuinely unsuitable to either party. If insufficient notice of this is given the Independent valuer reserves the right to continue with his/her inspection in any event. The Independent valuer will carry out the inspection at the earliest possible date. 5.2 The Independent valuer will provide the parties with a timetable relevant to the inspection this would, typically, allow him/her:- an initial period in which to carry out his/her inspection (dependent upon the size of the property) if required by either of the parties a separate 20 minute period will be allowed to each party to verbally summarise their claim 5.3 The Independent valuer may visit at his/her absolute discretion, in an unaccompanied capacity, other premises regarded by him/her as representing competition or comparables either on the day of his/her inspection or on some other date and may require either of the parties to liaise with him to facilitate access arrangements. 6 The Independent Expert Valuer s Determination 6.1 The Independent valuer will endeavour to provide his Rental Determination within four weeks of the date of his/her inspection. This timescale may only be varied owing to exceptional circumstances. 6.2 The Independent valuer s Rental Determination will set out a brief recital of the facts of the appointment and his/her opinion of the rental value. The Determination will not be reasoned and there will be no supporting dialogue or calculation. 6.3 The Independent valuer s Determination will be accompanied by, in Appendix Form, I II the Procedural Details document relating to the PIRRS Independent valuer Scheme The Independent valuer s Terms and Conditions
7 III A copy of the Deed of Variation signed by both the landlord and the tenant stating their wish to substitute the PIRRS in place of any form of Rent Review Dispute Resolution Procedure referred to under the terms of the relevant Lease or Tenancy Agreement. 7 Subsequent action 7.1 The parties on receipt of the Independent Expert Valuer s Rental Determination are committed to completing any documentation, to include a Rent Review Memorandum or other documents provided for within the Lease or Tenancy Agreement, within a period of three weeks. 7.2 The provisions of the Lease or Tenancy Agreement relating to any relevant back payments of rental and/or interest charges will apply. 7.3 The Independent Expert valuer has no power to rule on the matter of interest charges or costs. 8. Conclusion 8.1 The intention of the PIRRS Independent valuer Scheme is to produce a quicker and more cost effective method of resolving rent review disputes. 8.2 It must be clearly understood that the timescales detailed within this document are set out in good faith in order to ensure that both delays and costs relating to the process are kept to a minimum. It is intended that wilful contraventions of such timescales cannot be utilised in order to frustrate the process. A party aggrieved by the failure of the other side to comply with such timescales is entitled to request that the Independent Expert valuer proceeds to his/her Determination in any event. With regard to any dispute over timescale the Independent valuer s decision shall be final.
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