Top tips: how landlords and tenants can protect their premises licence

This is an area I have touched upon before, but in the current climate with premises closed and opportunities for new businesses, then the status of the premises licence is of even greater importance.

This advice is for both landlord and tenant.

Landlord

• You must protect the premises licence if you are able; it is a valuable asset and will make any transaction much easier if you can transfer to the new tenant. If you cannot transfer to the new tenant and the licence has lapsed, then applying for a new licence is a whole different ball game and may encourage a prospective tenant to look for other premises which do have a licence in force which can be transferred. The transfer is easier, quicker, cheaper and has no risk.

• Make sure the lease sufficiently protects you in terms of notification by the tenant of any issues at the premises, requiring your consent to any variation and that the licence is transferred at the end of the term to you.

• Register an interest with the local authority to protect your position, but if the site is particularly valuable (a similar licence is not likely to be obtained today) then consider applying for a shadow licence which gives maximum protection.

• Obtain and keep a copy of the premises licence and plan; it is surprising how many landlords do not know the contents of a premises licence for the property.

• If you are concerned about the tenant, e.g. rent arrears, then check Companies House for insolvency and register a notification.

Tenant

• If you are looking at a site, has the landlord secured the licence by way of transfer? Check with the local authority.

• If the landlord has not – check that the premises licence is in force; this means the solvency of the licence holder but also with the Local Authority that there has not been a surrender. There is greater risk of this if the tenant has left due to trading difficulties.

• Check that the licence is the most up-to-date and that there have been no changes.

• Check that the plans which are attached to the premises accurately reflect the internal layout.

• If you want to change the licence, then should this be conditional, or will you take the risk? Bearing in mind that you can only change the licence when you are the licence holder after completion and you have paid the money, and that therefore any changes would be at your risk. This is OK for minor alterations, but if the changes are commercially significant you may have to apply for a new licence anyway. If you do, try to ensure that the landlord will agree to surrender the licence as if you are in a Cumulative Impact Area this will be absolutely key to giving you the best chance of success.