It is possible for a landlord of a licensed venue to protect their business interest with a “shadow licence”.
The term “shadow licence” describes the situation where a premises licence is granted to one party (i.e. the landlord) in respect of a premises where another party (i.e. tenant) already holds a separate licence.
Whilst not common, it is legally possible for the same premises to benefit from two premises licences. This was confirmed in the case Extreme Oyster & Star Oyster Ltd. v Guildford Borough Council  EWHC 2174 (Admin). In this case a decision by Guildford Borough Council’s licensing services manager to reject an application from a landlord for a ‘shadow’ licence was unlawful, a High Court judge has ruled.
“Intend to carry out”
The Licensing Act’s only requirement for qualifying for a premises licence is that the applicant intends to carry out licensing activities at the premises. It is technically irrelevant whether that person actually has the right to occupy or trade from the address.
Applying for a shadow licence does technically therefore comply with the qualifying criterion of the Licensing Act 2003.
Protecting your business interest
It is not uncommon for a landlord and licensee to be different entities. Under these circumstances, the landlord is unlikely to be involved with the day-to-day operation of the business.
However, where a premises licence is subject to a review and either revoked or additional operating conditions are attached, this will have an impact on the landlord particularly in cases where a premises licence is essential for the business’ commercial viability.
This is where a shadow licence can be invaluable. If there is a shadow licence in existence, it can act as an insurance policy for a landlord.
Even after review proceedings, it is arguable that a shadow licence should be unaffected. Such an argument could only hold water however if the offending tenant is taken it out of the equation.
If you would like advice on applying for a shadow licence or facing a legal issue with your premises licence, contact us today for expert legal advice.
Regulatory defence barrister specialising in alcohol and entertainment licensing law, appeals and defence.
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