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Landlord and Tenants: How can you protect your Premises Licence?

licensing blog

What is a Premises Licence?

The Premises Licence itself authorises a premises to sell alcohol. It includes an Operating Plan, which sets out how alcohol can be sold on the premises and the other activities which can be carried out on the premises. A Plan is also included, and this illustrates the current layout of the premises.

Landlords – how can you protect your Premises Licence?

As a landlord, it is imperative you protect your Premises Licence if one is in place. This means ensuring it does not lapse and is not revoked. If you were leasing an existing pub to a tenant, and did not have a Premises Licence, then the tenants would not be able to sell alcohol without making a new licence application and may opt to back out of the transaction. If you do not have a Premises Licence, the value of your premises will be severely diminished.  It is a criminal offence to sell alcohol without a licence.

Where a new Premises Licence is required this could take many months – even then, there is no guarantee that the new Premises Licence would be granted. An example of this would be if your pub, restaurant or retail unit is in an area where the Licensing Board considers there is overprovision, it is even more difficult to obtain a Premises Licence as there is a presumption against grant.

Transfer:

As a Landlord you should consider whether you continue to hold the Premises Licence while the tenant operates the business and acts as premises manager or you transfer the licence to the Tenant. This should be covered in any lease or offer. 

Where you opt for the Tenant to hold the licence, the process, depending on the Board, takes around 6 weeks. Provided the transferee has no convictions and the Police make no representation, transfers must be granted.   

There are various ways you can protect your Premises Licence in this scenario:

  • Adding a clause to the lease to ensure your Tenant is bound to transfer the licence back to you when the lease ends and obtaining a Letter of Authority and Consent from them to transfer the licence to you or your nominee.
  • Requiring the Tenant to seek your approval for any variations to the licence.
  • Keeping the principal Premises Licence, Operating Plan and Layout Plan in your possession to ensure that it cannot be surrendered without your consent.

Keeping the Premises Licence in the Landlord’s name

Alternatively, there is the option to keep the Premises Licence in the name of the landlord. In order to ensure it is protected in this case you may consider adding clauses to your lease to ensure:

  • Your tenant complies with the Licensing (Scotland) Act 2005;
  • Your tenant will not do anything in contravention of any conditions in the Premises Licence;
  • Your tenant is responsible for supervision and management, by allowing them to nominate a premises manager; and
  • Your tenant is responsible for compensating the landlord for any breaches of the Premises Licence.

Tenants – how can you protect your Premises Licence?

As a tenant, it is also vital to protect your Premises Licence if you are to be the licenceholder. There are numerous ways to do this, by:

  • Checking that the landlord holds a valid Premises Licence which they will arrange to transfer to you (as opposed to you having to make a fresh licensing application);
  • Checking that the Premises Licence you have been given is current and that you are satisfied with its contents – this includes the Operating Plan and Layout Plan.
  • Ensuring that the landlord guarantees, prior to signing the lease, that there have not been any breaches of the Premises Licence.
  • Adding a clause to the lease to ensure that the landlord that will not do anything to adversely affect the Premises Licence.

If you would like to discuss any of the issues raised in this article, or any other Licensing related matter, please get in touch with a member of our team!

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