Leasehold pubs

Stage 10 in my overview of pub sale and purchase procedure: ” If the pub is leasehold, it is normal that the landlord’s consent to the transfer of the lease to the buyer is needed. Whatever timescale the buyer and seller have agreed, this is subject to the need to get “licence to assign” first. Usually, the procedure for this will have been started at stage 1, so that there are no unnecessary delays after contracts have been exchanged”

Ah! Leasehold pubs! Many leasehold pubs have a “pubco” (eg: Enterprise Inns or Punch Taverns) as freeholder, and this introduces its own, very special, series of procedures

As background, it is normal for a leaseholder who wants to sell his lease to have to get the freehold owner’s consent – “licence to assign”. The freeholder will, quite properly, want to check that the proposed new tenant is suitable – able to pay the rent, run the pub properly, etc. It is also fair enough that pubcos will have their own procedures for dealing with applications for licence to assign, but sometimes they do take it a little far

Though I have included this as stage 10 (because the contracted sale and purchase cannot be completed without the freeholder’s consent), the procedure should have started at lot earlier – even before a buyer was found, the seller should have contacted the freeholder to explain the propsal to sell, and to get details of the procedure to follow, so that the procedure can be initiated as soon as the buyer’s offer is accepted, in order to minimise delays

The buyer will need to give details of experience in the pub trade, will probably need to go on an approved training course, will need to demonstrate financial security, etc. The freeholder will want to see references, a business plan, proof of cash stake and a cash flow forecast. It will want details of the proposed Designated Premises Supervisor and evidence that he or she has a pertsonal licence

All this is fair enough, but some freeholders go further … (see next post)

Comments