Q: I am looking at taking a lease of a site that is currently closed but did trade as a bar / restaurant, and the Landlord has told me ‘don’t worry there is a licence in force you can use'. Do I need to check anything?
A: Yes, yes and yes.
It is perfectly common in the commercial property world for, sadly, sites to become vacant and these can be used again by another operator.
Usually these are leasehold and the landlord will offer a new lease to you as the new tenant. I find in my experience that many landlords are rather blasé about the Premises Licence, which they do not always take as seriously as they should.
There are a number of areas of negotiation and discussion which probably rank as being more important for the landlord, not least timings (when will they get their rent), the amount of rent and any work / dilapidations that need to be undertaken and who is going to do it.
The Premises Licence can therefore not be at the top of the agenda and may not even be mentioned in the Heads of Terms if the premises are already licensed.
Many landlords seem to think that magically the licence can be transferred, and I have even come across a situation where a landlord has simply written to the council saying that the tenant has left and can the licence please be transferred simply by request to the new tenant.
This of course cannot happen and a formal application needs to be made. You therefore need, as a matter of priority, to check, if you can, about the previous licence.
If the former operator has become insolvent then the licence will have lapsed if that company held the licence.
Also, if the former tenant was disgruntled they could have surrendered the licence, meaning that it is no longer in force.
What the Landlord should do in these circumstances, if possible, and certainly on an agreed departure / surrender, is to have the licence transferred to it to safeguard it so it can then transfer to you.
However, as I have indicated, this does not happen that often in practice.
You will then be left, if the licence is in force, with either trying to obtain the consent of the previous tenant, which if it left under a cloud you almost certainly will not get.
The two alternatives then are either to seek to transfer the licence without consent, but you must show that you took “all reasonable steps” to obtain that consent, and some councils look upon this rather strictly, or you have to apply for a new licence, which will cause possible delay and more cost to you.
In my experience, the landlord will not be at all interested in assisting you in doing this and will view it as entirely your responsibility.
If the licence is in force, you should check that it is acceptable to you in terms of its operating hours and conditions, you may also need to change the licensing plan by way of application if you are altering the internal layout of the premises.
I would therefore seek to push the issue of the licence further up the agenda with the landlord and / or its agents and, if necessary, to contact the local authority directly to find out the position.
- James Anderson is a partner at Poppleston Allen. See the previous Legal Q&A from Poppleston Allen here.
