Quick take: Many pubs are sold at auction because their business model failed. Don't inherit that failure. Watch out for strict "tied" leases, expensive TUPE staff transfers, and invalid premises licenses. Unwildered offers a rapid check for these liabilities.

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The "Turnkey" Temptation

Imagine you win a leasehold pub, ready to launch your craft beer taproom. The lease looks standard, but buried in the legal pack is a “Tie” clause: you’re contractually bound to buy all drinks from the landlord (usually a major brewery) at inflated prices. Your business plan is instantly compromised, and your margin evaporates.

1. The "Tie" That Binds

If the pub isn’t “Free of Tie,” you must buy beer, spirits, and soft drinks from the landlord. This can kill your profitability and restrict your product range. The lease will specify these obligations—miss them, and you risk breaching contract and losing your investment.

Nuance: “Tie” clauses are often hidden in lengthy lease documents. If you don’t spot them, your business model may be void from day one.

2. TUPE: Inheriting the Staff

If the pub is trading or recently closed, TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006) applies. You inherit the staff on their existing terms—length of service, redundancy rights, and potential unfair dismissal claims. You can’t simply start fresh. The legal pack should include “Employee Liability Information.” If it’s vague or missing, proceed with caution.

Caveat: TUPE can create unexpected payroll and HR liabilities, especially if there are unresolved disputes or long-serving employees.

3. The License to Trade

A pub without a Premises License is just a house. Has the license lapsed? Are there restrictive conditions (like “no alcohol in the garden after 9pm”)? The Local Authority Search reveals the licensing history and any issues. If the license is missing or under review, your ability to trade is at risk.

Completeness: Always check for license validity and any conditions that could impact your business hours or offerings.

4. Stock at Valuation (SAV)

Look for the “SAV” clause. You bid £150,000, but on completion, an independent valuer counts every keg and crisp packet. You get a bill for £8,000, payable immediately. Budget for this cash flow hit, or risk being caught short.

How Unwildered Helps You Plan

Unwildered’s AI identifies operational constraints through a 30+ point analysis:

• Lease Audit: We scan lease documents for “tie” clauses and permitted use restrictions.

• TUPE Check: We look for employee schedules and liability information in the Special Conditions.

• Licensing: We cross-reference the Local Search for premises license validity and conditions.

Unwildered isn’t a substitute for solicitors or licensing consultants, but it flags major blockers in the legal pack so you can make informed decisions before committing.

FAQ

Can I convert the pub to flats?
Maybe. Check for “Asset of Community Value” (ACV) status. If the community has listed the pub, you face hurdles and potential moratoriums on sale or change of use.

What about the flat upstairs?
Pubs often have manager’s accommodation. Check the tax status—is it liable for Council Tax separately from Business Rates? This affects your fixed costs and profitability.

What about ChatGPT?
ChatGPT doesn’t understand the nuances of the “Beer Tie” or TUPE regulations in insolvency contexts. It handles general text well, but UK licensing law and employment liability transfer require specialized knowledge, which Unwildered provides.

How do I check for licensing issues?
Review the Local Authority Search and premises license documents in the legal pack. Unwildered’s report will flag missing or restrictive licenses, so you can ask the right questions before bidding.

Where can I find properties to bid on?

Visit our article for a list of the best property auction websites near you.

Disclaimer: This article is general information, not financial, tax, or legal advice.