By David Burrough

When entering into a contract for the purchase of a motel business (freehold or leasehold) there are an array of issues to keep in mind.  One of these issues is the liquor licence.  A lot of motel businesses have a liquor licence which will need to be transferred to the purchaser at settlement.  Accordingly a contract for the purchase of a motel business should be conditional on the transfer of a liquor licence.

In both Queensland and New South Wales it is necessary for intending purchasers to complete a course before being entitled to a transfer of the liquor licence.

Queensland

In Queensland in October 2003, Parliament passed new laws requiring applicants for liquor licences to undertake a mandatory training course.  This training scheme commenced on 1 January 2004 and requires all new licensees to undertake a two-day training course which will focus on the liquor laws and best practices in venue management.

The liquor licence transfer will not be able to be approved until training is undertaken, although there may be some exceptions to this rule.

New South Wales

In New South Wales the transfer of a liquor licence must be approved by the Licensing Court of New South Wales.  Usually a provisional transfer will be granted prior to settlement, with the final transfer being granted approximately 3 months later (after the court has prepared a probity report).

An application for the transfer of a liquor licence will not be accepted without a certificate of completion of an approved course or an application for exemption from undertaking the approved course.  The course which must be completed is a five day, Restaurant/Motel Licensees Course (which includes a responsible service of alcohol module).

From 1 January 2004, all licensees and permanent staff members who are involved in the sale, supply or service of alcohol must hold a recognised Responsible Service of Alcohol certificate.

From 1 July 2004, all casual staff members who are involved in the sale, supply or service of alcohol must hold a recognised Responsible Service of Alcohol certificate.

General

In both states, an applicant for a liquor licence may encounter problems if he or she has a criminal history.  Ultimately a police clearance must be acquired before the licence can be issued.  In Queensland a licence cannot be issued until the relevant checks have been completed.  In New South Wales an applicant may receive a 3 month provisional licence until the relevant checks of his or her existing criminal history are completed.

We recommend that prospective purchasers of a motel business investigate the liquor licence courses early in the transaction to avoid any possible delay of the settlement date.