Know the details of your new pub before purchasing

Recently, a client contacted me in a panic and explained that, in his excitement, he had entered negotiations for the lease of a central London late-night bar and paid a £50,000 deposit as security. 

He has now found that as a result of crime and disorder, the premises licence for the site had been reviewed by the police. The licence was revoked by the council licensing committee and the decision to revoke upheld on appeal. To make matters worse, the premises is also located in the council’s cumulative impact area.

While noting that this situation is uncommon, my client now faces an uphill struggle. Although not impossible, acquiring a new premises licence for a premises fraught with difficulties will be difficult. Potentially, this venture could cost him a substantial amount of money not only for the application and the subsequent committee hearing, but also a potential appeal.

Furthermore, if a premises licence is not granted for the site, he could lose not only his deposit but he could be ‘stuck’ with a lease and its associated costs for a premises unfit for his purposes.

It is imperative that if you have an interest in a premises, then legal advice should be sought and proper due diligence checks conducted.

The checklist below is by no means exhaustive but it gives you an initial basis on which to make preliminary enquiries prior to making any form of commitment to acquire a site.

• Check that a valid premises licence is in force and that it has not been either suspended, surrendered or revoked
• Conduct due diligence enquiries with not only the police but also with the environmental health department and the licensing department of the relevant council
• Establish whether or not there are any pending applications relating to the premises licence
• If relevant, consider the effect of any cumulative impact policy
• Clarify whether or not there are any other licences associated to the premises and their status, eg, tables and chairs licence
• Enquire whether or not the premises is the subject of any restrictive orders such as an abatement notice issued under Section 80 of the Environmental Protection Act, 1990
• Consider and review the premises licence, including all the conditions and ensure that the approved plans attached to the licence accurately reflect the layout of the premises
• Carefully consider the terms of any restrictions detailed in the lease or planning permission associated to the premises
• It is worth trying to negotiate a contract or lease conditional on obtaining a valid and suitable premises licence?
• Consider the location of the premises and the possibility of challenging neighbours affecting your operation
• It is always worth speaking to the local planning officer, to establish whether or not there are any applications or planning permissions granted for new residential dwellings that may affect your trade
• Conducting detailed checks prior to entering any agreement to take on a new premises could potentially save you not only time and stress but also, as in my client’s case, wasted money