So you are buying a pub?

22nd January 2020

The decline in the number of pubs over the last decade has been well publicised but encouragingly, the Office of National Statistics (ONS) has recently published figures which show that the number of pubs has increased for the first time since 2010.  The UK ended March 2019 with 320 more pubs than the year before.  To put the figures in context, around 700 pubs had closed in the UK each year for the previous nine years.

Reasons cited for the change in fortunes include improvements in menus, offering accommodation and providing entertainment such as themed events and live music.  Former chancellor Philip Hammond also introduced relief on business rates for some pubs which may also have been a factor.

When buying a pub in England and Wales, particular care must be taken with the premises licence. A premises licence is a licence from the local authority for the sale of alcohol and the provision of other licensable activities. The owner or occupiers of a pub must have a premises licence in order to legally sell alcohol in England and Wales.

When buying a pub with an existing premises licence, you must ensure that you (a) fully understand the contents of the licence and (b) procure that the licence is transferred to you, together with the pub itself.

Your lawyer will obtain a copy of the premises licence from the seller and send it over to you for review. You must check that the range of licensable activities permitted by the licence, and the hours in which they are allowed, are suitable for your intended use of the property. You must also check that the conditions attached to the licence do not have an adverse impact on your plans for the property.

You should also check that the plans attached to the premises licence accord with the current layout of the property. If not, the property may not be trading in accordance with the premises licence. You should also consider whether you will need to vary the premises licence if you intend to make significant changes to the layout of the property.

It is also a good idea to speak with your local licensing, environmental health and police officers to see whether there have been any recent or ongoing licensing or enforcement issues with the property (e.g. noise abatement notices) which could affect your ability to vary the licence further down the line (e.g. to extend trading hours).

Checks should also be carried out with the licencing authority to ensure that the copy of the premises licence provided by the seller is the most up to date version of the licence, and that it hasn’t been revoked or surrendered. Confirmation should also be obtained from the licensing authority that there are no outstanding licensing applications, particularly any review of the premises licence. If a review of the premises licence is underway, this can result in things like opening hours being reduced or the imposition of more onerous conditions.

Enquiries should also be made of the seller to ensure that the holder of the premises licence has not died, lost capacity, become insolvent or (if a company) been dissolved as these circumstances can result in the premises licence lapsing.

Once it has been established that the licence is still in force and fits with your plans for the property, your lawyer will insert a provision in the contract requiring the seller to provide the necessary consent forms for the transfer of the premises licence to you.   These forms will be handed over on completion of the purchase of the property so that you can file them with the licencing authority to complete the transfer of the premises licence into your name.

Get in touch

If you would like some help with an issue relating to commercial property, our experienced team at Murrell Associates would be delighted to help.  You can contact Caroline Daly on 01872 226990 or by emailing caroline.daly@murrellassociates.co.uk.