Qualification
Ownership disclosures, background review, financial information and other eligibility requirements may apply.
What “transfer” means
A liquor license generally cannot be treated like an ordinary piece of personal property. The buyer may need to qualify, the intended location may need approval, local agencies may need to sign off and the licensing authority may need to approve the transfer before the buyer can exercise the license privileges.
Premises approval
Zoning, distance requirements, floor plans, local permits or other site-specific approvals can affect the transfer.
Status verification
Renewal status, taxes, liens, disciplinary issues and transfer restrictions should be reviewed before closing.
What escrow is designed to do
Escrow is a controlled closing arrangement. Rather than handing purchase funds directly to the seller before the transfer is complete, the parties can define when documents and money are delivered and what conditions must occur before funds are released.
Deposit
The buyer places the agreed deposit or purchase funds with the designated escrow or closing party.
Transfer filings
The parties submit required applications and supporting documents to the applicable licensing authorities.
Conditions are satisfied
Regulatory approval, lien releases, tax clearances or other agreed closing conditions are completed.
Closing and release
The escrow holder follows the written instructions for release of money and delivery of closing documents.
Escrow instructions should answer
- Exactly how much money is being held?
- Who is authorized to instruct the escrow holder?
- What approvals or documents are required before release?
- What happens if the transfer is denied?
- What happens if the parties disagree about whether a condition was met?
- Who pays transfer fees, taxes, escrow fees and other closing costs?
- When may a deposit become non-refundable?
Do not let the money move faster than the approval process. The safest closing structure is one that clearly ties release of funds to the specific conditions the parties agreed upon.
Planning a purchase or sale?
Review the buyer and seller guides before negotiating the closing structure.