I want to buy a pub what should I do?
Buying a pub can be a hugely nerve-wracking experience with many aspects to cover before you get your name above the door.
The first step is to decide whether it is in fact the life for you. It is important also to research, plan and adapt your business strategy. Decide how you want to own the business and consider the following options:
- Take a tenancy for a number of years tied to a brewery - this business will not be your own
- Take a lease for a longer period of time which will allow you to have more control
- Purchase the freehold where every aspect of the business is yours outright.
Regardless of which option you choose, all businesses need supply chains to succeed and you must consider the costs of purchasing stock, products and equipment, including leasing of any third-party items. It may be that you want to continue with existing suppliers but also consider the opportunities available with new suppliers and the benefits of signing up to new agreements.
Licensing is an important aspect of any public house business purchase. It is important that you transfer any premises licence into your name or someone of your choosing. A premises supervisor will be responsible for ensuring that the conditions of the premises licence are complied with at all times. The premises licence will determine what, when, and how you will be able to carry out activities in the business, varying from service of alcohol and food through to opening hours and even entertainment allowed in your pub. You should consider if the existing premises licence fits with your strategy and whether any applications need to be made to vary the licence such as extending opening hours.
I have fallen out with my business partner what should I do?
Sometimes, perhaps through nobody’s fault, business relationships reach a natural conclusion. When this happens, it is important that all parties continue to communicate effectively to ensure that the value they have created in the business is not lost.
Engaging in sensible discussions at an early stage will allow both parties to go their separate ways, whilst retaining as much value as possible in their respective businesses. Early resolution, perhaps through mediation or without prejudice discussions, can allow the business to be carefully and fairly divided up, or for one party to exit the business with an appropriate amount of compensation.
In these circumstances mediation is a particularly effective tool, allowing all parties to resolve their issues and go their separate ways without destroying the value in the business.
How do I proceed if one of my directors is running a secret company?
Directors of companies have specific duties to the company (known as fiduciary duties), which oblige them to act in the best interests of the company, even if those interests conflict with their own personal interests.
Sometimes directors try to syphon parts of the business off into their own companies, so that they can retain the profit for themselves. If you become aware of a director doing this it is important to challenge the behaviour as soon as possible to avoid any suggestion that you have accepted it by conduct. Recovering loss for the company is more difficult than preventing it occurring in the first place. If you become aware of any activity like this, it is important to seek legal advice as soon as possible so that you can assess your options.
Generally speaking, there are far more options open to you at an early stage of a dispute than later on, when positions have become entrenched, or serious damage has already been done to the business.
I think my business partner is using the partnership accounts wrongly, what should I do?
What each partner is entitled to do in a partnership is defined by the partnership agreement, or the conduct of the parties established over a period of time, or a combination of both.
If you have discovered that your partner is in breach of their duties under your agreement you need to act swiftly to ensure that irrecoverable damage is not caused to the business.
If, for instance, a partner is taking money from the partnership account for their own ends, as well as depriving you of the potential benefit of that money, your partner may also be failing to pay debts to your suppliers, which in turn could leave you personally liable for the debts of the business.
In these circumstances it is important to get advice quickly on your options, hopefully before any serious damage is done to the business.
I have been served with a section 146 notice, what is this and do I need a solicitor?
A section 146 notice is served by a landlord when they consider their tenant to be in breach of the terms of the tenancy.
Other than in relation to unpaid rent (where a section 146 notice isn’t required, but sometimes served), a section 146 notice is a necessary first step in the process of recovering possession of a property. The notice must give the tenant a reasonable period of time to comply with its requirements. Should the tenant fail to comply, the landlord can take steps to terminate the tenancy, resulting in the tenant being evicted from the property.
If the tenant accept the contents of the section 146 notice but wish to avoid being evicted, they should comply with its requirements as soon as they are able. It is also sensible to engage in discussions with the landlord to let them know they are doing that. If some additional time is needed to comply, the tenant should ask the landlord, Providing the request is reasonable, they should accept your request.
If the tenant contests the contents of the section 146 notice because they do not believe they are in breach, then it would be sensible to consult with a solicitor so that a formal response can be given to the landlord. It makes sense to do this before the landlord issues proceedings seeking to evict the tenant from the property, as in the long run that is likely to save a considerable amount of money.
What are dilapidations and how can I calculate them?
Dilapidations is the technical word used to describe the repairs which need to be carried out at a property at the end of a tenancy. A tenant’s obligations in relation to dilapidations are defined by the tenancy itself, and are not always related to the condition of the property when the tenant took it on.
If you are a landlord wishing to pursue a tenant in relation to dilapidations there are certain steps you need to take before you can pursue such a claim, and it is sensible to get early legal advice on those options.
If you are a tenant who thinks a dilapidations claim may be made against them, it is important that you take steps before the end of the tenancy to complete any works which you think need to be done.
If, as a tenant, you think there is likely to be a dispute over the dilapidations, it is also important that you gather evidence prior to your departure from the property in the form of a surveyor’s report and/or photographic evidence showing the condition of it when you leave.
The tenant at the pub won’t leave, what can I do as the owner?
As the owner of the property there are a number of options available to you. You could pursue the tenant for the unpaid rent, perhaps by using County Court proceedings. You may decide that the tenant is not going to be able to pay and would rather evict them from the property and install another tenant. If that is the case, then it is important that you take legal advice early. Attempts to collect the rent may prevent you from subsequently seeking to evict the tenant for failing to pay.
When advising we also take into account why the tenant won’t leave, if, for instance, they need to be re-housed by the Local Authority, then the commencement of proceedings is usually required before the Local Authority will deem the tenant to be homeless, and agree to re-house them.
There also needs to be a realistic appraisal of the tenant. Are they failing to pay because it is a particularly poor trading period and they will make up the money at some other time, or are they a perennial non-payer who needs to be evicted?
We offer pragmatic advice on these issues, and the ways in which they can be resolved.