News Hostile Transfers

Regaining a premises licence from a former tenant can cost landlords dearly

A situation I have seen arise more frequently of late is that of what I would call a hostile “transfer”.  In a nutshell the premises licence is in the name of a tenant, the tenant and the landlord fall out for some reason and the tenant leaves the premises voluntarily or is ordered to do so by Court Order and the landlord wants the premises licence transferred back into their name in order to remarket the property.  The landlord, particularly in the cities, will have good reason to want that specific licence back rather than apply for a new licence – a new licence application could take months to obtain, it could be granted with hours that were less than the existing licence, quite probably more onerous conditions and if you were in a Cumulative Impact Area it’s perfectly possible the licence wouldn’t be granted at all.
 
However, in this scenario the tenant refuses to give consent to the transfer of the premises licence (a key requirement).  The Licensing Act makes provision for situations where the consent of the existing Licence Holder to a transfer of the licence cannot be obtained, stating that where the Applicant (i.e. the landlord in this case) has taken all “reasonable steps” to obtain that consent but cannot actually obtain it then he or she must be exempted from the requirement to get that consent and the transfer can be processed accordingly.  However, it is almost certain that this particular section of legislation was intended to cover situations where the existing Licence Holder’s consent cannot be obtained because they cannot be contacted or traced or perhaps lack the capacity to give consent. 
 
However, in this case our tenant is explicitly refusing consent.  Sometimes the tenant will demand payment for his agreeing to sign a consent and / or write to the Licensing Authority (sometimes through solicitors) threatening to sue if it transfers the licence against his wishes, stating that a premises licence is a “possession” and the Licensing Authority’s interference with it (by allowing the landlord to transfer without obtaining his consent) would amount to an actionable claim in damages or other legal remedy.
 
What is a landlord to do in such circumstances?  Pay the “ransom” demand to obtain the consent?  Write an equally threatening letter to the Licensing Authority stating that as the tenant has absolutely no proprietary interest in the premises and indeed cannot even access it that the licence must be transferred forthwith?  Licensing Authorities get very nervous in these circumstances, often just sitting on the fence.
 
Not much help when the property is sitting empty.
 
This is a legal conundrum that has not yet been tested in the higher courts.  A common-sense interpretation, and one that is supported by many commentators on this aspect of the law, is that where the Premises Licence Holder has no practical or legal interest in the premises any longer and the landlord or other applicant can prove that they can use the premises for licensable activities and has attempted to obtain that consent, that the Licensing Authority should exempt the applicant for a transfer from having to obtain consent.
 
Any other view surely will create a market for ever – increasing ransom demands.