MRO Video
Overview
Market rent only (MRO) is a right under the Scottish Pubs Code that lets an eligible tied-pub tenant break free of their product tie and buy from any supplier they choose. From 30 June 2025, any tied-pub tenant has been able to ask their landlord for an MRO lease.
If the tenant and landlord can't agree the new rent between them, a RICS-qualified rent assessor determines a fair market rent for the pub. Requesting an MRO lease is a formal step - if the request is unsuccessful, or the tenant withdraws it, that affects their ability to make another MRO request for two years, so both sides benefit from understanding the eligibility rules before a request is made.
What the tenant needs to know
Who can ask, and the four grounds a landlord can decline on
Any tied-pub tenant can ask their landlord for an MRO lease. A landlord can only decline for one of four specific reasons - check whether any apply to your pub before asking, since a declined request (for any of these reasons) affects your ability to ask again for two years.
Notice already served - if your landlord has already served notice on your lease, they can decline.
Lease term - for leases longer than a year, your landlord must accept once you've reached the halfway point of your term (or are within six months of it - they may set the MRO date to that halfway point). For leases of a year or less, they must accept once you've held the pub for at least a year across successive leases. Earlier than that, they may decline.
Investment agreement - if you and your landlord agreed a qualifying investment in the last five years, they may be able to decline, but only where the investment is worth at least £35,000 or 150% of your annual rent (whichever is greater), you entered into it voluntarily, you had the chance to get alternative estimates, and - for agreements from after June 2025 - you were told in writing it could affect your MRO right.
Previous MRO request - if you've requested an MRO lease for this pub in the last two years, your landlord can decline the new one.
Making the request
There's no set form of words, but your written request must include your name, postal address, email, phone number, and the tied pub's name and address.
What your landlord owes you back
Unless one of the four reasons above applies, your landlord must respond in writing with an MRO lease offer - as soon as possible, and no later than 4 weeks after receiving your request. The offer must include a draft lease or deed of variation, the proposed rent, an explanation of how that rent was calculated, and advice to seek independent advice before agreeing.
Ending the process
You can withdraw at any point - for example, if you agree a different lease outside the Code's process. Because a withdrawn or unsuccessful request can be used to decline a future one for two years, it's worth confirming any decision to withdraw to your landlord in writing.
Concerns about how a request is being handled can be raised with the SPCA Enquiry Line on 0300 244 1225 or pubscodeadjudicator@gov.scot.
This page describes the investment-agreement exception ending as one condition: work "delayed or stopped... due to factors outside your control." The pub-owning business guidance below splits this into two separate, more specific grounds. Worth agreeing one wording both audiences see.
What the pub-owning business must do
Before a lease is signed
You must tell a prospective tenant, in writing, that entering into an investment agreement could affect their future right to an MRO lease - and that if the agreement meets the threshold described above, you may be able to decline an MRO request from them for five years from the date it was made. This written notice isn't required for investment agreements made before these regulations took effect on 30 June 2025.
Assessing a request
When a tenant asks for an MRO lease, you may only decline for one of the four grounds set out above - notice already served, the lease-term threshold not yet reached, a qualifying investment agreement, or a previous request within the last two years. If none apply, you must offer an MRO lease.
Responding and negotiating
Your offer must be in writing, sent as soon as possible and no later than 4 weeks after you receive the request, including a draft lease or deed of variation, the proposed rent, an explanation of how you calculated it, and advice for the tenant to seek independent advice. You then have up to 8 weeks (plus a further 4 by mutual agreement) to negotiate terms together, each side covering its own legal costs.
If you can't agree the rent
You appoint a RICS-qualified rent assessor with the tenant's consent, normally within 3 weeks of the negotiation period ending - the fee is split between you and the tenant. Full timescales for this stage are set out below.
This guidance ends the investment-agreement exception on two separate grounds - capital works not starting within 12 months of the agreement, or stopping for 12 months or more, in either case "without a reasonable excuse." The tenant guidance above states this as a single, more general condition. Recommend settling on one wording for both audiences.
Process and timeline
These are the maximum timescales set out in the Code - most cases move faster. Steps 4-9 run from the end of the negotiation period and only apply if the rent isn't agreed directly.
Tenant submits MRO request, in writing.
Landlord responds with a lease offer - up to 4 weeks.
Landlord and tenant negotiate terms - up to 8 weeks, plus up to 4 more by mutual agreement. If rent is agreed here, the process ends and the lease proceeds; if not, the steps below begin.
Landlord appoints a rent assessor, with the tenant's consent - up to 3 weeks.
If no agreement on an assessor, referral to the Adjudicator - up to 2 weeks.
Adjudicator appoints a rent assessor - up to 3 weeks.
Rent assessor determines the market rent - up to 4 weeks.
Landlord offers the MRO lease at the assessed rent - up to 4 weeks.
Tenant acceptance period - up to 2 weeks.
Related forms, templates and guidance
Pre-lease information requirements checklist (PDF)
SPCA Enquiry Line - 0300 244 1225 - pubscodeadjudicator@gov.scot
A "What is MRO?" explainer video is agreed for this page but not yet produced.