This article was originally published in the Pennsylvania Observer/Pennsylvania Beverage Media in July 2022. A pdf version can be found here.
Q. I am the president of a corporation which holds a restaurant liquor license issued by the PLCB. The corporation does not own the building nor real estate where the business is located, but leases it from the 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 a request online to place the license into safekeeping due to the closing of the business. The license will be held in safekeeping for a period of two years without cost. The board will thereafter send you a letter accepting the license into safekeeping and giving a date when the two-year safekeeping period ends. 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, but will be held in safekeeping by the board for two years without having to pay any fees to the PLCB.
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 have the license transferred to another location. If, due to circumstances beyond your control, you cannot locate another suitable location, or you cannot obtain a lease for other premises, or the PLCB fails to approve the transfer within the two-year period, you must apply to the board to extend the two-year safekeeping for another period of one year. This is done by filing an application online with the board to extend the safekeeping period and pay the fees for the additional one-year extension before the end of the initial two-year safekeeping period. If the license is not transferred and reactivated within the two-year period or you do not extend the two-year safekeeping period with the board, the license will be revoked by the board and canceled. The safekeeping fees are substantial for each additional extension year, and are doubled yearly thereafter. For example, Philadelphia County is $5,000 for the third safekeeping year and $10,000 for the fourth year. 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 other 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.
