I’m keeping this story completely anonymous in order to not stir any hornets’ nests. Somewhere in the UK a retailer decided it was time to sell up and retire. He had a buyer, but unfortunately the pub nearby turned out to have an archaic covenant on the lease preventing the sale of alcohol. The retailer legally held a licence and did sell alcohol.
The covenant was only discovered relatively recently when the store was extended. They wrote to the landlord, who didn’t reply. The solicitor took the view that the covenant therefore didn’t cover the extended bit so the retailer carried on selling alcohol from it.
But with the impending sale they discovered that the covenant actually covered the whole shebang and they may have to pay a hefty premium plus legal fees to overturn it. His solicitor was a bit nonplussed.
I consulted Chris Mitchener at Licensing Solutions and he said: “These are well known and relate to days when breweries owned more land around a pub so put a covenant on it to stop competition - surprised solicitor has not seen it before - we have seen loads of them.
“Usually, they can be bought out - sometimes they can be defeated by a good lawyer. It really does depend on the wording. Certainly, you need to know the cost - £10-25K is not unusual, but I have had £5K before now, too. Once you have an idea of cost it indicates a way forward, but a query on costs should be made without prejudice.”
I also consulted property specialist Barry Frost, who runs Commercial Plus (Chester), who kindly did a land registry search for the exact wording of the covenant. It said that any building already in existence or built in the future would not be allowed “at any time hereafter” to sell “intoxicating liquors in any manner”.
When I last rang the retailer he had decided, on his solicitor’s advice, to just quietly continue, so it’s so far, so good.