Attracting the right tenants and managing them long-term is the goal of commercial property landlords and their agents. But the hospitality industry comes with its own special volatility and requires unique action to fully safeguard the value of the premises. Registering your financial interest in licensed premises is one step you can take to protect your investment.

Matthew Jones, Managing Director of Liquor & Gaming Specialists, believes that commercial property landlords need to be more aware of the responsibilities and protections that arise under the Liquor Act 1992 (Qld) in relation to licensed premises. “Ensuring the landlord’s interest in the property is properly registered is imperative if liquor licensing complications are to be avoided” he said. “We regularly encounter situations where the liquor licence has been lost that could have been easily avoided. This makes the process for a new tenant significantly more expensive and time consuming.”

Why Should You Register as a Financial Interest?

Under the Liquor Act, the Commissioner is required to keep a register of licences, permits and various applications. The register is supposed to include not only particulars of the licence holders themselves, but also those of other interested persons such as landlords, mortgagees etc. Although registering these interests is a statutory obligation (see Section 44A of the Act), and it is an offence not to register, there is at present very little insistence on parties registering and virtually no enforcement. It has become de facto voluntary.

In the circumstances therefore, registering might not seem like a priority. However, there are compelling reasons to do so.

The Benefits of Being a Registered Financial Interest

Streamlined Transfer of the Licence if a Tenant Abandons the Premises

A liquor licence is attached to the premises, so it cannot be “taken” by the licensee if they leave the licensed premises. If a licensee abandons licensed premises a person with a financial interest in either the business or the property can apply at short notice to continue to conduct the business with the benefit of the liquor licence – an interim authority. If you have a registered interest in the premises, it streamlines the process for obtaining an interim authority, which in turn makes it easier to transfer the licence to a new tenant when the time comes.

Preserve the Licence if the Business Ceases to Operate

If the business ceases to operate, this constitutes grounds for cancellation of the licence by OLGR. If no other person is registered as a financial interest, the right to sell liquor from the premises can be lost without notification. An incoming tenant would no longer have the option to transfer the licence, but would face the more onerous, time consuming and expensive task of applying for a new liquor licence. Not only does this involve application fees, police checks, evidence of planning approval, advertising, and potential for objections etc, it also triggers a fresh assessment of the premises by OLGR. This may result in conditions that are different, and possibly more restrictive, than those attached to the cancelled licence. In a worst-case scenario, the application may be rejected due to changes in circumstances since the original licence was issued.

Receive Notification of Non-Payment of Licence Fees

Annual licence fees for all licensed premises are due by 31 July each year. If they are not paid the licence is automatically suspended from that date, and if the fees remain unpaid for a further 28 days the licence is automatically cancelled. Each year, OLGR cancels several dozen licences for failure by the licensee to pay the annual licence fee. Registering a financial interest in the licensed premises will allow OLGR officers to contact those parties so that arrangements can be made to have the fees paid and preserve the licence, and therefore the value of the property.

Receive Notification of Disciplinary Action

If the licensee is facing Disciplinary Action under the Liquor Act, OLGR is required to notify all people with a registered interest in the premises. Disciplinary Action can have serious ramifications for the viability of licensed premises and being informed of this in advance may allow the landlord to take steps to preserve the licence.

When you consider these scenarios, the value of registration is abundantly clear. In addition to fulfilling your legal obligation you will put yourself in a position to more closely supervise licensing actions that can profoundly affect the value of your property, and its desirability to a prospective tenant.

Dates to Remember

To ensure you understand your obligations regarding licence fees and to avoid paying any penalties for unauthorised trading, we have provided the important dates below.

1 June 2016 – Deadline for updating your details through the OLGR client portal.

30 June 2016 – Date by which each licensee will have received an assessment of annual licence fees from OLGR. If you have not received an assessment by this date, please contact OLGR on 07 3224 7131. (Current and past LGS clients can feel free to contact us for assistance.)

1 July 2016 – Earliest date you can pay your annual licence fees. This can be done through the OLGR client portal, by telephone, by post or in person at the customer service desk. NB: OLGR will not accept credit card payments by email or facsimile.

If you have suffered some financial hardship or natural disaster you may be able to pay your annual liquor licence fees in instalments. We recommend you contact OLGR in advance of the deadline if you want to explore this option. Of course, we are also happy to assist in the preparation of submissions if required.

1 August 2016 – Effective deadline for payment of annual licence fees because 31 July is not a business day. Your licence will be automatically suspended if fees are not paid by this date.

Please note: if your licence is suspended due to non-payment of annual fees, you are not authorised to sell liquor until the fees have been paid. Numerous licensees were fined for this in the 15/16 financial year.

29 August 2016 – Date on which your licence will be cancelled if annual licence fees remain unpaid.

This article was edited on 5 July 2016 to remove the following text from the introduction. It is included here for reference.

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A number of licensees have contacted our office recently because of letters received from OLGR regarding payment of annual liquor licence fees. So far, the correspondence from OLGR has been a reminder of the process to pay annual licence fees, rather than a demand for payment.

• Annual liquor licence fees for the 2016/17 financial year must be paid by 31 July 2016 (this is a Sunday, so the next business day will be the effective deadline).
• However, annual fees cannot be paid before 1 July 2016.
• A fee assessment will be sent to each licensee in June.
• If you have changed your contact details or postal address you must login to the OLGR client portal and update your details by 1 June 2016.
• Licensees who trade past midnight may see an adjustment in their fees to reflect changes to trading hours following the most recent amendments to the Act.