AFTER A RESTAURANT IS EVICTED FROM ITS LOCATION, ITS LICENSE REMAINS ON AS THE TENANT

Law Offices of John P. Connell, P.C.:   A restaurant or liquor store that possesses a liquor license and rents its premises from a landlord has a right to occupy that premise provided that it has a written lease or a month-to-month tenancy with the landlord.  When the lease ends, however, or the tenant is otherwise evicted from the premises, it ordinarily ceases its occupancy of the premises and the landlord then is free to rent the premises to the next restaurant or liquor store.  Right? Not so fast.

If the restaurant or liquor store vacated the premises but did not sell or transfer its liquor license out of the premises, that license still occupies that premises as far as the local municipality that issued the license is concerned, and it will continue to occupy that premises until it is revoked or not renewed at the end of the year.  In the meantime, a new license possessed by a new restaurant or liquor store cannot move into the same premises, as one location cannot have two separate liquor licenses. While the old tenant may be long gone, therefore, the landlord cannot lease its space to a new licensed establishment until the old license is gone, even though the landlord had nothing to do with the old license and has no ability to get rid of it.  Think of it, a piece of paper squatting on property with no procedure whatsoever to have it evicted!

This issue recently came up before the Boston licensing Board in early September 2012 when a Hyde Park landlord that had evicted a restaurant learned that he could not lease the space to a new licensed restaurant until the old restaurant’s liquor license had left his building.  The landlord pleaded for the Board to revoke the license – which it considered doing in light of the fact that the old restaurant’s owners did not appear for the hearing – but Board Member Suzanne Ianella recognized that even of the Board did revoke the license, the license holder had the right to appeal such a revocation to the ABCC which would still prevent the landlord from re-leasing the space for “months and months and months.”

This situation is not too uncommon, as local licensing boards will often provide a licensee up to six months or longer to sell its license even though the licensee has closed its business and no longer occupies any business location.  During that time period, the landlord will find that there is no summary process of housing court procedures for evicting a city issued piece of paper.