To Buy or Not to Buy

It is important whether you are buying a new house or the freehold of a pub to carry out certain checks in order to know exactly what you are buying and to make sure there are no significant problems which may either affect your decision or the price that you are prepared to pay.

It is therefore good practice to carry out certain due diligence checks.

It may be that you are using a property lawyer who will ask a number of questions about the business and which will include a request for a copy of the Premises Licence and plans but in any event please consider the following:-

• It is important to check the solvency of the existing licence holder, whether it is an individual or a limited company as a premises licence automatically lapses on the insolvency of the holder.
• It is very important to check that the copy of the premises licence you have received is the most up to date and I suggest this is done directly with the Licensing Department either via its register or (as these are not always updated) by telephone call or email to the Licensing Officer.  We have been involved with several matters where the licence presented has been changed either by variation or following a review and there is a number of conditions on it which have not been disclosed on the copy licence provided.
• It is also sensible to go into the pub and check the internal layout against the plans provided to ensure that no unauthorised structural or other alterations have been carried out.
• Regardless of what the responses to enquiries indicate, I suggest that telephone calls are made to Licensing, Environmental Health (particularly if the premises does entertainment or has an outside area) and the Police to see if there have been any ongoing recent issues, say within the last two years.  You could be inheriting these problems and you need to know what the position is and if there have been a number then if may affect your decision or you could ask for a reduction in the purchase price because of the enhanced risk.
• Consider also whether you have any intention of altering the licensed premises; is the current licence fit for your purposes in terms of hours, licensable activities and conditions and would you intend to change the operation for example by extending the premises or using an outside area?  It is worthwhile making enquiries about these things before you purchase as if you do not you will be doing them “at risk” with no idea of the likely response of the Responsible Authorities.

Please note that this is not an exhaustive list by any means but some significant pointers as to potential key issues.