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.