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Acquisition of premises

Make sure you enquire before you acquire

In spite of uncertain times both politically and economically, there appears to be a significant amount of merger and acquisitions activity going on within the trade.  This could be because operators are reluctant to invest in new build sites in the current financial climate and another opportunity to grow their business is through acquiring existing sites.

If you are minded to buy premises from an existing operator, here are a few important licensing considerations:

  • Make checks to ensure that the holder of the premises licence is still solvent.  If an individual premises licence holder is made bankrupt or becomes incapacitated or dies, the licence will lapse immediately.  This is also the case where a company holding a premises licence becomes insolvent.  There is a 28 day timeframe to transfer the licence to effectively reinstate it, however if the transfer is not submitted within this timeframe, the licence cannot be reinstated and a new premises licence application would be necessary;
  • It is important to carry out due diligence checks on the premises you are buying.  Ideally, you should speak with the Authorities (Licensing, the Police and Environmental Health) to establish the history of the premises, whether there have been any issues or complaints which you are likely to inherit and that the licence is still active.  If any annual fees are outstanding, you would need to pay these before operating the premises as the licence is likely to have been suspended;
  • When preparing to transfer the licence, you will need to seek the consent of the current premises licence holder and they will need to complete a consent form.  If the premises licence is held by an individual or in joint names, the consent of the individual(s) is required.  If the premises licence is held by a company, a Director or Company Secretary would need to sign the consent form;
  • If you intend to offer gaming machines within the premises and the premises currently benefits from a Licensed Premises Gaming Machine Permit for 3 or more machines, you will need to ensure that you transfer the Permit at the same time as transferring the premises licence.  If you do not transfer the permit at the same time as the premises licence, it will lapse and you would need to apply for a new permit.  Where the premises have the benefit of a notification for one or two machines, you would need to submit a new notification and pay the relevant fee as there is no facility to transfer a notification.

Whilst the above tips can seem onerous, particularly undertaking due diligence on a large estate, it is important to do some research and ask questions of the seller before committing to buying as it mitigates any potential risk and can save unexpected expense and stress in the longer term.

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