Buying a restaurant: the licence, the lease and the debts you cannot see
Nextica Law & Tax supports the sale and transfer of bars, restaurants and hotels with the review that decides the price: the real status of the licence or activity notification under the Catalan regime for public entertainment and recreational activities of Decret 112/2010, whether the terrace has its own authorisation and for how many tables, assignment of the lease and the landlord's right to raise the rent under art. 32 of the Urban Leases Act, debts to suppliers, to the building community and for utilities, and how the price is split between premises, equipment and goodwill.
A venue is bought for its turnover, and then the terrace that sustains it turns out never to have been authorised.
What's included
3. Reviewing the terrace
whether it has its own authorisation, for how many tables, and with what history of renewals and reductions.
4. Searching for open enforcement files and interim measures, because they are inherited with the business.
5. Reading the lease before setting the price
the assignment regime, the landlord's right to raise the rent and the remaining term.
6. Debts that travel with the business
suppliers, the building community, utilities, and the employment debts of the transferring staff.
7. Allocating the price between premises, equipment and goodwill, with holdbacks tied to whatever remains unresolved.
YOU BUY THE TURNOVER AND YOU INHERIT THE LICENCE
The handover is the sector's typical deal and it is almost always signed without reviewing the one thing holding the business up.
An authorisation that does not cover the actual activity
the Catalan regime for public entertainment and recreational activities treats a bar, a venue with background music and one with live entertainment differently, and buying the second with the first one's licence is buying a deferred closure.
Decret 112/2010A terrace with no authorisation of its own, or with fewer tables than are actually used: if the terrace sustains a large share of takings, buying without checking its authorisation means paying for income that can disappear at the next municipal review.
Assigning the lease without reading it before setting the price
the law allows assignment where a business activity is carried out on the premises, but gives the landlord the right to raise the rent unless otherwise agreed, and modern leases usually do agree otherwise.
art. 32 Urban Leases ActFrequently asked questions
What should be checked about the licence before taking over a venue?
Three things, each separately. First, that there is a valid authorisation for the activity actually carried out: a bar without music is not the same as a venue with background music or live entertainment, and the Catalan regime for public entertainment and recreational activities under Decret 112/2010 treats them differently. Second, that the authorised capacity, opening hours and installations match the reality of the premises. And third, whether there are open enforcement files or interim measures, because they come with the business and can end in a cease order.
Can the landlord raise the rent when I transfer the business?
For business premises leases, art. 32 of the Urban Leases Act allows the contract to be assigned without the landlord's consent where a business activity is carried out on the premises, but with two consequences: it must be formally notified within the statutory period, and the landlord is entitled to increase the rent by the percentage the law itself sets. All of that unless the contract provides otherwise, which is standard in modern leases. Which is why the lease is read before setting the transfer price, not afterwards.
Let's talk about your company.
Tell us your situation and we'll reply within 24 working hours.