MARKET RENT ONLY (MRO) LEASE IN SCOTLAND – GUIDANCE BY MDE PUB CONSULTANTS

Are you a tied pub tenant in Scotland wondering how to gain more freedom and control over your business? The Scottish Pubs Code, introduced on March 31, 2025, is a game-changer, bringing with it the crucial right to a Market Rent Only (MRO) lease. This means you could soon operate your pub free-of-tie, breaking away from supplier obligations and paying only a fair market rent. 

What Exactly is a Market Rent Only (MRO) Lease in Scottish Pub Codes? 

Imagine running your pub without being forced to buy specific beers or supplies from your landlord. That’s the essence of an MRO lease. It’s a free-of-tie lease where you pay a market rent for your premises, giving you the freedom to choose your suppliers and products. This can significantly boost your profitability and give you more control over your inventory and pricing. 

The MRO rights under the Scottish Pubs Code became available on June 30, 2025. This is a significant date for eligible tenants in Scotland, as it marks the beginning of the process to transition to a free-of-tie lease, often referred to as “MRO Scotland rights.” 

Your Step-by-Step Guide to Going Free-of-Tie in Scotland 

Ready to explore your MRO options? Here’s a clear roadmap of the process: 

Step 1: Send a Formal Request for an MRO Lease (MRO notice) 

The first thing you need to do is officially ask your pub-owning company for a Market Rent Only (MRO) lease. This is done by sending a written notice (called an MRO notice) that clearly says you want to switch to an MRO lease under the Scottish Pubs Code. 

There’s no fixed format, but make sure your notice includes: 

• Your full name 

• The name and address of your pub 

• Your current lease reference 

• A clear statement referring to the Code (for example: “This notice is served under Regulation 16 of the Scottish Pubs Code Regulations 2024.”) 

Timing matters! You can send this notice no earlier than 6 months before the halfway point of your lease. Ideally, send it around that halfway point or at another allowed trigger event. 
If you send it too soon or during a time when the law says you can’t, it may be rejected. Lastly, keep proof that you sent it, such as a recorded delivery receipt or email confirmation. This is important, as key deadlines start from the day your landlord receives your notice. 

Step 2: Wait for the Pub Company’s MRO Offer (Within 4 Weeks) 

After your landlord receives your MRO notice, they have 28 days (4 weeks) to reply. Their response should be one of two things: 

• A formal MRO offer – this should include a proposed market rent and either a draft amendment to your current lease or a new free-of-tie lease. 

• A refusal – if they think you’re not eligible, they must give a clear explanation why. 

According to the Scottish Pubs Code, the MRO lease they offer can’t include worse terms than your current lease, except for necessary changes to make it free-of-tie (like removing product supply obligations). 

Take time to review the offer carefully. If you don’t receive a response within 28 days, or if their refusal seems unfair or unclear, you have the right to raise the issue with the Pubs Code Adjudicator. 

Step 3: Negotiation Period (Up to 8–12 Weeks) 

Once you receive the MRO offer, you enter the negotiation stage, which usually lasts up to 8 weeks. During this time, you and the pub company try to agree on the new free-of-tie lease terms, especially the market rent. 

If both sides need more time, you can mutually agree to extend the talks for another 4 weeks, giving you a total of up to 12 weeks to finalise everything. 

• If you reach an agreement during this period, you’ll sign the new MRO lease and officially become free-of-tie. 

• If you can’t agree on the terms, the process moves on to the next step, where an independent third party can step in to help. 

Step 4: Independent Rent Assessment (If Needed) 

If you and the pub company can’t reach an agreement during the negotiation stage, don’t worry, the Scottish Pubs Code gives you a clear next step: an independent rent assessment. 

Here’s how it works: 

• Appointing a Rent Assessor (Within 3 Weeks): The pub company has 3 weeks to appoint an independent and experienced rent assessor; but only with your consent. This person will fairly assess what the rent should be under a free-of-tie lease. 

• Referral to the Adjudicator (If No Agreement on Assessor): If both sides can’t agree on who the assessor should be within that 3-week window, either party has 2 more weeks to ask the Scottish Pubs Code Adjudicator to appoint one for you. 

• Rent Assessment Report (Within 4 Weeks): Once appointed and given all the necessary documents, the rent assessor has 4 weeks to inspect your pub and provide an independent rent report. This report sets out what a fair market rent would be without any product tie. 

• Final MRO Offer (Within 4 Weeks): Based on that report, the pub company then has 4 weeks to send you a final MRO lease offer, reflecting the assessor’s rent figure. 

• Your Decision (Within 2 Weeks): You’ll then have 2 weeks to accept or reject that final offer. 
  • ✅ If you accept, you’ll sign the new lease and officially become free-of-tie. 
  • ❌ If you decline, the process ends unless you pursue further dispute resolution. 

Step 5: Final Resolution or Dispute 

• If you accept the final MRO lease offer – congratulations! You’re on your way to running your pub free-of-tie, with more control over how you operate and where you source your products. From start to finish, the whole MRO process usually takes about 4 to 6 months. 

• If you don’t accept the final offer, or if other problems come up along the way, such as disagreements over the process, deadlines, or terms. You still have options. 

You can refer the matter to the Scottish Pubs Code Adjudicator for arbitration. This means an independent decision will be made to settle the issue, ensuring the process remains fair and balanced. 

Reach Out to Expert Guidance – MDE Pub Consultants 

Moving to an MRO lease is a big step, but you don’t have to do it alone. At MDE Pub Consultants, we specialise in the Scottish Pubs Code and offer clear, practical support for tied pub tenants across Scotland. From serving your MRO notice to negotiating lease terms, we guide you every step of the way. 

Contact MDE Pub Consultants for free expert advice tailored to your pub. 

Email: info@mdepc.co.uk

Phone: 0330 088 3133