This article was originally published in The Pennsylvania Observer / Pennsylvania Beverage Media in May 2024. A pdf version can be found here.
Q. I am the president of a corporation which holds a restaurant liquor license issued by the Pennsylvania Liquor Control Board (PLCB). My corporation does not own the building or the real estate where the restaurant is located, but leases it from the real estate owner. We have just received notice that our lease will expire in 90 days and will not be renewed. What will happen to our liquor license? Can we transfer it to a new location?
A. You will be able to file an application with the PLCB to transfer the liquor license to a new location. However, when you cease doing business the liquor license should be placed into safekeeping with the PLCB pending the transfer to the new location.
Assuming the lease term does in fact end at the expiration of the 90 days, and assuming that the landlord has given proper notice to you that the lease will not be renewed as required by the lease agreement, you must vacate the premises before the expiration of the 90-day period. However, within 15 days after you vacate the premises, you must place the liquor license into safekeeping with the liquor board by filing an online request due to the closing of the business. The board will thereafter send you a letter accepting the license into safekeeping and giving a date when the safekeeping period ends. The license will be held in safekeeping for a period of two years without cost. Once it is returned to the board, the license is only invalidated as to the leased premises for which it was originally issued. The license itself will not be terminated.
A license that is held in safekeeping is required to be kept current by the filing and payment of all state taxes and also by the payment of the required fees and the timely filing of the necessary PLCB license renewal and validation applications.
During this two-year period, you may attempt to activate the license by transferring it to another location for your use or to sell the license to a third party. If, due to circumstances beyond your control, you cannot locate another suitable location; or you cannot obtain a lease for another premises; or cannot find a buyer; or the PLCB fails to approve the license transfer within the two-year period, you must apply to the board to extend the safekeeping period for another year. This is done by filing an application online and paying the additional fees for the extension before the end of the initial safekeeping period. If the license is not transferred and reactivated within the two-year safekeeping period or you do not extend it with the board, the license will be revoked and canceled.
The safekeeping fees vary according to the county in which the license is located, but are substantial for each additional extension year, and doubled yearly thereafter. For example, in Philadelphia County, a county of the first class, the PLCB fees are $5,000 for the third safekeeping year and $10,000 for the fourth. Obviously, you must either activate the license or sell it as soon as possible.
You should consult with your attorney on this matter of the liquor license and the termination of the lease since there may be other issues which can present legal problems for you. For example, the lease agreement may provide the landlord with the right to purchase the liquor license from you at the end of the lease.
