An often overlooked requirement under the Liquor Control Act (WA) 1988 (LCA) is for liquor licence holders not to make any alteration to a licensed premises without the prior approval of the Director of Liquor Licensing.

This not only applies to the physical alteration of a building, but also to alterations that reduce the area within a premises, such as the installation of bars or refrigerators.

This could have implications for parties entering into contracts involved with licensed premises, such as lessors, lessees, builders and those planning to buy or renovate licensed premises. The consequences of failing to obtain the Director’s approval include being given directions to remove the alterations, or worse, the suspension of the liquor licence.

Without a well thought out agreement, licence holders could find themselves unable to sell alcohol, unable to update their venues, or bound by service contracts where the work or goods are not permitted to be used.

Entering into agreements

When entering into agreements involving licensed premises, parties should ensure that the agreement provides the flexibility to comply with the LCA.

Lessors should insert into lease agreements provisions that lessees will comply with the LCA and will not alter the premises without the consent from the lessor. Indemnities from the lessee for compromising the liquor licence could also be inserted to protect the lessor from losses if the liquor licence is suspended. If a tenant jeopardises the liquor licence, the lessor could suffer serious losses in the licence attaching to the premises.

To allow for future renovations and upgrading of the licensed premises, lessees should negotiate their leases so that at the very least, lessors will not unreasonably withhold consent to alter the premises.

Licensees may need to also ensure that equipment agreements involving licensed premises, are conditional on the consent of the director being obtained if necessary.

Including such provisions in agreements will give more flexibility to the parties involved, and assist in upgrading licensed premises in the future.