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Premises licence review before purchase

Napthens - June 19th 2017

Often when purchasing hotels or public houses, the premises licence is the last document to be reviewed. This can be dangerous and may cause major issues once trading commences. Prior to purchasing/leasing a licensed premises, the premises licence should be assessed and any due diligence carried out promptly.

Firstly, it is important to ensure that the premises licence is still active and has not lapsed for whatever reason. This is quite a common issue, especially when a premises is being sold, as the premises licence can be cast aside and forgotten about in the sale process. If a premises licence has lapsed, and this is discovered prior to purchase, then at least the cost of a new application can be factored in, and the likelihood of successfully obtaining a new premises licence explored. This will avoid unnecessary delays and prevent further cost at a later stage.

Secondly, ensure that the premises licence is suitable for the proposed operating style. This would include checking the activities, hours, conditions and plans on the premises licence. Quite often, when purchasing premises, clients wish to refurbish and change the layout of the premises. Any change in layout, for example, would require an application to vary the premises licence. It is vital to know this prior to purchase as depending on the individual circumstances, applicants may face objections from local residents or possibly from the police or environmental health. This again would delay the application process and could have financial implications.

Consideration should also be given to making any transaction conditional upon any licence application being granted. This would give the option of walking away from a transaction if it is not possible to obtain the premises licence required.

The simplest way of avoiding all the above issues is by ensuring the premises licence has been reviewed and assessed prior to purchase. If any attention is required, then at least this is known at an early stage so that time scales and additional costs can be weighed up.

For more information on licensing, please get in touch with a member of the licensing team.

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