ABC License Safekeeping is not so safe

If you have a liquor license in DC, and for whatever reason you are not operating, the law requires that you temporarily turn your license in. This process, known as Safekeeping, is most common in cases of repair/renovation, moving to a new location, expired leases, or a sale of the license after an establishment has closed.

However, even when you license is tucked away with the Agency, there are things you must do to make sure you that it will be ready to use once you finish your buildout or move.

Safekeeping filing and fee requirements

Once your license is in Safekeeping, you need to renew and pay a fee every six (6) months. If you don’t, the Board could cancel your license. That could mean thousands in expenses, lost time, and revenue while you try to get a new one. Worse yet, if your establishment is in a moratorium zone (Adams Morgan, DuPont Circle) or is of a type that is no longer issued (nude dancing) you might not be able to get a new one. In those cases, carelessness as to Safekeeping obligations could be the effective end to your business.

Here is how it works:

When your operations cease, you turn in your license by physically taking it off the wall, handing it to the Agency and filling out a 1-page Safekeeping application. Not rocket science.

Then, on September 30 and March 31st of each year, you have to write a letter requesting extension of the Safekeeping. In it, you must explain why the establishment is no longer operating and with it, pay the applicable fee. If the license is in safekeeping for less than two years is the fee is 25% of the annual license fee which goes up to 50% in the third and subsequent years.

If you don’t the Board will send you notice, then cancel the license.

“I didn’t get the renewal notice” = not an excuse

The potential consequences of falling asleep at the wheel are illustrated in a recent Board case. The Argonaut LLC, Board Order No. 2018-551 (D.C.A.B.C.B. Sept. 28, 2018). In that case, the Argonaut failed to submit a letter and pay the Safekeeping fee, which is not uncommon. However, after the Board notified the Licensee’s attorney and still did not get a response, the Board canceled the license.

In refusing to reinstate the license, the Board held that notice to the lawyer was sufficient and it is the Licensee’s problem if they didn’t get notice from their Lawyer. License gone forever.

The lesson here is that Safekeeping doesn’t mean you just forget about your license! Be diligent in paying your safekeeping fees and filing extensions.

If you have questions about a license in Safekeeping, or any ABC licensing matter, please contact me, or feel free to use the scheduling tool  on my website, to set up a free case evaluation at your convenience.

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