LAST ORDERS FOR THE LICENSING REGIME On 24 November the landmark upheaval of the licensing laws will be complete. Under the new regime, drinking establishments will be able to stay open 24 hours in a move which the government believes will "revolutionise the way in which we spend our leisure time".
Key Points
A DATE TO REMEMBER
7 February of this year marked the beginning of a transitional period during which licensees could submit applications to vary or convert existing justices’ licences under the Licensing Act 2003. This period finished on 6 August. In the months leading up to 6 August it became clear that the floodgates had remained shut – existing licensees seemed unaware of the need to obtain a new license or delayed submitting their applications. The Times, on 9 June, reported that only 3.6 per cent of licence holders had applied to the local authorities but by 1 August, Licensing Minister, James Purnell, claimed that 65% of all applications were in.
For those who missed the August deadline, an application for a new licence can still be made but applications to convert or vary existing licences will no longer be accepted. What might otherwise have been a rubber stamping procedure is now treated as an entirely new application.
24 November – any person caught trading without a valid licence risks a fine of up to £20,000 and/or six months in prison.
THE FACTS OF THE ACT
The Licensing Authority
The backbone of the new regime is the creation of a single licensing authority in each area which will usually be the local authority for the area in which the premises are situated. The transfer of responsibility from magistrates to local authorities proved one of the most controversial points during the introduction of the Act but, according to Tessa Jowell, will enable local authorities “to deliver a licensing regime that is effective, fair and responsive to local needs”.
Licensable Activities
Licensable activities do not just include the sale of alcohol. Four categories of licensable activities are created: the sale by retail of alcohol; the supply of alcohol by clubs to their members; the provision of regulated entertainment and the provision of late night refreshment (click here).
Licensable activities can only lawfully be carried on if authorised by a premises licence, club premises certificate or temporary event notice. However morris dancers will be pleased to know that “morris dancing or any dancing of a similar nature is not licensable.” Where the premises are used for the sale of alcohol, a personal licence is also required.
Premises Licence
A premises licence is required for: the sale of alcohol; the provision of regulated entertainment; and for the supply of late night refreshment. Although much publicity has been given to the fee hike for town centre pubs, once obtained, the premises licence is valid indefinitely. A licence may be suspended, revoked or surrendered and is subject to review at any time.
Individuals, companies, partnerships or other organisations can apply for a premises licence provided they carry on or propose to carry on a business which involves the use of the premises for the licensable activity. There is no requirement that an applicant must own an interest in the property and it is for the parties concerned to decide on the identity of the applicant.
Many institutional landlords will consider the licensing function to lie firmly within the remit of the tenant particularly as the application requires a designated premises supervisor to be identified. However, the statutory guidance issued by Secretary of State suggests that with cinema chains, the normal holder would be the owner of the cinema and not the manager. Likewise, the pub operating company of managed pubs would apply for the licence and not the manager.
A mandatory condition of the premises licence is that there can be no supply of alcohol unless there is a designated premises supervisor who must be identified in the application for the premises licence. The designated premises supervisor is a person in managerial control of the premises but not necessarily constantly present. If the identity of the designated premises supervisor changes then the premises licence must be varied to appoint a new supervisor.
On a sale of property the parties will need to consider whether the premises licence is to be transferred, which can be effected immediately. The application is made by the transferee and if not accompanied by the consent of the premises holder, the applicant must show that he has taken all reasonable steps to obtain that consent and also that he will be able to use the premises for the licensable activity.
An application for a premises licence must be accompanied by an operating schedule, a plan of the premises and a prescribed consent from the designated premises supervisor. The operating schedule contains details of the proposed opening hours and contains the conditions on which the premises will be operated. Applicants are advised to give considerable thought to these conditions before submitting an application as quite a lot of detail must be included in the application. The premises licence will only permit the licensable activities specified in the application. New activities will require an amendment to the licence.
A typical lease will contain a covenant obliging the tenant to comply with all statutory obligations. This far reaching covenant helps safeguard the landlord against changes in the law which may affect the tenant’s use of the premises over the term of the lease. Where the use clause permits the sale of alcohol then a specific covenant obliging the tenant to comply with the Licensing Act 2003 would be usual. The tenant would then be contractually bound to the landlord to comply with the provisions of the Act as well as being bound under statute.