Each pub purchase is different and will be tailored to your needs, but in a nutshell we will usually:
Negotiate and advise you on the basic terms of the deal (or the 'heads of terms') that may have been put to you by the seller and/or the agent (if any).
If need be, advise you on starting up your business and as to whether a freehold, leasehold or tenanted pub purchase is best suited for you.
Check and negotiate the lease or (in the case of freehold purchase) transfer documentation.
Check and negotiate the contract for sale of the business.
Raise enquiries and carry out searches on the business to be sold and the leasehold property.
Advise you on licensing arrangements, employment issues and hire agreements.
Check the landlord's title to the pub.
Buying a pub is a complex process, so this overview can only give you a general indication of the usual steps that should be taken when buying a pub.
The first step to buying a pub is to find a premises that you like the look of and that appears to make sound financial sense. Typically buyers ask property agents for assistance, but there are many other ways of finding attractive propositions such as talking to people in the business or searching the internet.
Once you've found a pub for sale that you like the look of, the next step will be to agree on the basic terms of the purchase (called the 'heads of terms') with the seller, usually via an agent. It is important to take advice from a solicitor on the heads of terms, as all too often basic essential terms of the transaction are not discussed until much later in the buying process. By then, the seller will often be much more reluctant to agree to any new terms or any changes to the main terms of the purchase. Worse still, if an important term cannot be agreed later and the deal falls through as a result, you risk losing all the time and money that you've put into the purchase.
You should gather as much information about the finances of the business as possible, such as audited accounts, VAT returns, management figures, weekly takings, etc. You should discuss these carefully with an accountant. It is important that you take advice from an accountant who is experienced in licensed properties.
It is absolutely essential to employ a competent surveyor to check the building. If, for example, the roof or foundations are damaged, this can be very expensive to fix. Even if you are leasing the building and the landlord is directly liable for the cost of these maintenance issues (and you are not indirectly liable via a service charge), these problems can still cause severe disruption to the business and consequently lose you a lot of money.
The surveyor should also advise you on the condition of the contents being sold with the business. For example, it is pointless paying good money to the seller for pumps if they will need replacing within a couple of months.
The seller's solicitor should send your solicitor documentation that will allow the latter to examine the seller's 'title' to the property. Whether you are buying a freehold or leasehold pub this means that your solicitor will advise you on whether:
1. The seller actually has the right to sell the pub.
2. There are any problems with the legal title to the land you are going to buy or lease. The potential 'problems' are too numerous to list, but could include not being able to use the land for a particular use (e.g. as a restaurant) or having to pay a third party for the use of some part of the property.
There are many enquiries that your solicitor will need to raise with the seller concerning the property and the business. These will range from checking to see that there is a valid existing premises licence in place, to ensuring that the business being bought is legally sound.
Your solicitor will also need to carry out a number of 'searches', normally to check whether there are any other interests or restrictions affecting the property that you would otherwise be unaware of. You will normally need to carry out environmental, local, water and chancel searches. Other searches may be necessary depending on the transaction.
The seller's solicitor will send the contract for sale of the pub. If a new lease is being granted, a draft lease will also be sent. If you are buying the freehold, draft documentation necessary to transfer the freehold title will be sent. Your solicitor will invariably need to make many amendments to these documents to cater to your specific business needs. It will also usually be necessary to negotiate various terms. Your solicitor will explain the implications of the contract and lease/transfer documents.
Once you are happy with the terms of the draft documents, then 'engrossments' (i.e. final versions) will be produced for you to sign.
If there is to be an exchange of contracts, normally signed contracts and the deposit funds will need to be sent to your solicitor. You solicitor will then exchange contracts and send the signed contract with the deposit funds to the Seller.
After exchange of contracts, completion will take place. This is when the balance of the purchase funds are sent to the seller and you officially become the new owner of the pub, and the new tenant or freehold owner of the land.
An analysis of official government data by real estate intelligence firm Altus Group found that 386 pubs closed across England and Wales in 2022, while 153 closed during the first three months of 2023, continuing a trend that has seen more than a quarter of all British pubs close since 2001. As a result, community ownership is becoming an increasingly popular model for saving pubs which serve as essential spaces in the local community, particularly in remote areas, and prevent them from being turned into residential developments.
As the name implies, a community pub is one that is collectively owned and controlled by local people, usually with a tenant who supports the community’s objectives. Community shares can be issued and sold to individuals, groups and local businesses, many of which will thereby be encouraged to use the pub more frequently, contributing to the success of the community ownership model.
Even if the owner has made a planning application to redevelop a pub into a residential dwelling, local councils will often list it as an Asset of Community Value, which then gives local residents the legal right and opportunity to club together and buy the premises collectively (known as Right to Bid). This status normally lasts for five years, and means that local residents have priority over developers to buy the pub at the same price if it is put up for sale.
Our commercial property team can advise on whether a freehold or leasehold agreement is the best way for you to purchase, sell or become the tenant of a pub, and the legal process by which you can do so.
We can help you negotiate the terms of the contract of sale or leasehold agreement. This means you can set up your business in the right way for you. We can also carry out the necessary searches on commercial properties, and can advise on licensing arrangements and employment matters.
We have solicitors specialising in pub acquisitions and sales, with many years of combined experience in handling these matters from our Liverpool City Centre office. We offer a nationwide service and highly competitive fixed fee legal services. Bartletts Solicitors is a law firm that you can trust, established in Liverpool since 1860, with the expertise and experience to handle your pub acquisition and help you achieve your aims.