Coronavirus: Preserving your licences

2nd April 2020, 9:06 am

Many leisure operators are concerned about the business impact that faces them in the current climate. One thing that is particularly key for operators to be aware of is the knock on effects the current circumstances could have on their premises licence(s).

Firstly, it is important to remember the distinction between the suspension and lapse of a premises licence.

A premises licence can be suspended by the local authority for non-payment of the relevant annual fee. Industry groups are pushing for these fees to be postponed in light of the fact that premises are not permitted to open, but this has not been confirmed as yet. As such, annual fees continue to fall due on the anniversary of the grant of the licence.

If these are not paid, they are recoverable as a debt and the licence will be suspended meaning that licensable activities cannot take place until the fee is paid. Operators may take the view that they don’t wish to make the payment if it falls due over the period that they are closed. Payment of the fee once premises are permitted to reopen will lift the suspension immediately.

However, a licence will lapse if the premises licence holder dissolves or becomes insolvent. As such, operators with concerns about the continued solvency of their company should remember that if an insolvency event occurs, the licence will lapse as a direct result of this. The licence can only be salvaged if transferred to another company or individual within 28 days of the insolvency event, otherwise it is lost forever.

Operators will be aware of the significant value of their premises licence, particularly in cumulative impact areas where obtaining a new licence on the same terms could present a significant challenge. It may therefore be sensible to pre-emptively transfer licences if there is a concern that a lapse may occur, simply for the purpose of preserving them. A licence could, for example, be transferred to a solvent individual to hold, pending the company making a decision as to the viability of the site going forward and whether it may continue to be operated by a different (perhaps associated) company.

Landlords with concerns about the solvency of tenant operators should also bear this advice in mind, as licences can be transferred to landlords to hold, either in preservation for existing tenants or, in the worst case scenario, for new tenants going forward.

Operators should also consider other licences they hold, such as their highways/street café licences. Fees for these are often charged by local authorities relevant to usage or square footage, and it is understandable that operators may not wish to pay for the use of an area that they will not be able to benefit from for an indefinite period. However, if highways licences are not renewed before their expiry date, they expire permanently – meaning that a brand new application would be required as and when the operator wanted to recommence use of that area. This could present challenges and would have at least a 28 day consultation period, which may be problematic for operators who wish to start up again immediately when they are able, particularly if this is during the summer months.

The Kuits licensing team have had success during this period in negotiating with authorities to reach an agreement that licences can be renewed, with payment only to be required when the area begins to be used again, and the yearly fee to be on a pro-rata basis. We are happy to undertake these negotiations on behalf of operators wherever necessary.

Should any operators or landlords require specific advice on these points, they should contact the Kuits Licensing Team on 0161 838 7888 or online here.

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