By thePublican.com's team of legal experts from London solicitor Joelson Wilson.
When the provisions of the Licensing Act 2003 regarding premises licences come into force, the procedures for buying a pub will need to be revised in certain ways.
One of these concerns the licensing conditions in the contract. At present someone buying a pub makes arrangements to be granted a protection order or interim authority to trade under the seller's licence. Typically you would go before the magistrates on the completion date or shortly beforehand, so that you can be certain that when you complete you will have the right to carry on the business at the premises. These applications are rarely rejected, unless the police object. The buyer or, in the case of a company its nominee, then applies at a later stage for the actual transfer of the licence. It is just possible that the licensing justices may consider the applicant is not a fit and proper person to hold a liquor licence.
In the future a buyer will have to make a written application under Section 42 of the new act for the premises licence to be transferred. As it is not yet clear how long these applications will take to be processed, the buyer would have no authority to carry on "the licensable activities" at the pub unless steps were taken to protect their position. This would be done by making the application just before completion and requesting under Section 43 that the transfer should have immediate effect.
The request may only be made with the consent of the holder of the premises licence. Therefore the contract for the sale should include the agreement of the licence holder to the buyer making a Section 43 application on or before completion.