If you are a real estate broker who aims to bring top notch work your clients then it’s crucial not to miss any critical issues during real estate transactions. Being unaware of key issues and nuances for leases involving liquor licenses could cost your client thousands in additional costs, delays in operating the business or cause the transaction to bust, subsequently, result in you losing them in the process.
Liquor licensing issues can have drastic effects on real estate transactions. Sometimes to the point where it can cost a real estate broker the deal.
Commercial real estate agents aware of liquor licensing laws when brokering a real estate transaction have a distinct advantage.
If you’re working with a potential buyer or tenant of commercial real estate, you need to be familiar with the licenses and other permits the client will need to operate the intended business at the property if you want a smooth transaction to take place. Many businesses may require a liquor license to operate to their full potential: restaurants, bars, convenience stores, and and sip businesses, breweries, cideries, bed and breakfasts, hotels and distilleries.
When negotiating the purchase or lease of property where alcohol will be sold as either a new venture or the continuation of an existing business, a contingency for obtaining a liquor license should be included in the purchase and sale contract or lease. Such contingency should allow the buyer to terminate the agreement before closing or lease commencement if the liquor license cannot be obtained. Clients seeking an on-premises retail license may have to wait several months for the license approved and be issued.
Tracy Jong works as a rochester liquor license attorney who specializes in liquor license law in New York. What she had to say on the subject of liquor license disciplinary penalties by the state would scare any business owner where liquor is a main profit point:
“Failing to meet state and federal liquor licensing laws can result in a business losing 10’s of thousands of dollars in lost potential profits and penalties, and, depending on the severity of the penalty, may result in a business losing their liquor license for good. An investigation by the New York State Liquor Authority may result in a business terminating the license and banning the licensee from holding any liquor license for two years.”
Liquor licensing considerations can be important in the purchase, sale or lease of real property in any state, including, as we have seen, New York. Often overlooked, these considerations may have a significant impact on the timing of real property transactions, as well as on the client’s ultimate ability to serve, manufacture or sell alcohol at the new location.