As the owner of a tenanted estate you will periodically consider whether the premises licence for each of your pubs is best held by you as landlord or by each individual tenant. You will need to balance the advantages of being in control of the licence against the potential liabilities which would attach to you as Premises Licence Holder.
One fact that you are likely to take into consideration is any liability which might attach to you as landlord for the actions of tenants if you hold the Premises Licence.
It is worth remembering the case of Hall & Woodhouse Limited –v- The Borough and County of the Town of Poole where the Premises Licence holder was found NOT to be vicariously liable for the acts of its tenant and its manager for breaching the licence conditions.
Hall & Woodhouse Limited, a brewery company, owned the Stones Pub in Poole and held the Premises Licence for the pub. The tenant of the pub employed a manager who was the Designated Premises Supervisor. The pub was operated in breach of its licence conditions when it allowed live music to be played after 11pm and also kept its beer garden open after the permitted hour.
The High Court was asked to decide if, under section 136 of the Licensing Act, Hall & Woodhouse, as holder of the Premises Licence, could be liable for the activities that had gone on. The Court decided that section 136 is directed at the person who “as a matter of fact” actually carries on licensable activities at the premises. Each case will turn on its own facts and the Court will naturally look at the level of involvement of the Premises Licence Holder to ascertain who was responsible. In this case Hall & Woodhouse were not involved in the day to day running of the pub and so were not found to be liable.
Nevetheless, Hall & Woodhouse had to prove the point in Court, and there was undoubtedly a cost to that.
Other liabilities of the Premises Licence Holder
If you decide to hold the Premises Licence yourself as landlord be aware that the decision in Hall & Woodhouse applies only to liability under s.136 and does not therefore remove liability in all cases. Some sections of the Licensing Act state specifically that the Premises Licence Holder is liable in certain situations. In addition this case dealt with a tenanted estate. If you hold a licence as an employer you would be liable for the acts of your employees subject to being able to successfully argue that you had exercised all due diligence to avoid the offence and can therefore make out the defence in s.139 Licensing Act.
Advantages of the tenant holding the Premises Licence
Hall & Woodhouse was a welcome decision in terms of liability for landlords who hold the Premises Licence. However, Hall & Woodhouse did need to appear in court and court actions are always expensive.
One advantage of the tenant holding the Premises Licence himself is that in the case of breach you should not be required to attend court as landlord which will represent a saving in terms of cost and time quite apart from any fines or penalties which may be ordered. However, given the value attached to the Premises Licence you would probably not want to leave your tenant to deal with any review proceedings on his/her own and it would be sensible to consider Attorney provisions in the tenancy so that you can take control of the proceedings if you consider it prudent.
One of the concerns you might have about your tenant holding the Premises Licence is that if he suddenly leaves the premises you would require his assistance to transfer the Premises Licence into your new tenant’s name. Attorney provisions can help with this, or alternatively you can insist that the Premises Licence is held in the tenant’s name but make it a condition of the tenancy that all Licence documentation will be held by you together with a transfer form. This means that, in the event of the tenant leaving the premises, you are able to deal with any necessary applications including the transfer of the Premises Licence into the new tenant’s name.
Click here to read: Safeguarding your premises licence
The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.