Your Liquor License Is At Risk If Your Government Approvals Are Not Current

In Hospitality, Legislation by Richard Bianco

To run a restaurant, bar or any other business in the District for that matter, you need the approval of several government agencies, not just the ABC Board.

Of course, you know that.

You probably remember when you first got your license, you had to show the licensing staff at ABRA that your company is in good standing, that the building where your business resides has a certificate of occupancy for use as a bar/restaurant, that you have a business license, that you passed a Health Department inspection, and that you are registered to collect Sales Tax. That’s it right? No more fussing, jumping through hoops or dealing with red tape from DCRA.

Of course not. If you’ve been in town for more than five minutes, you know that DCRA has an endless supply of hoops, red tape, and administrative nonsense, to drive any small business owner crazy or sometimes even out-of-business completely.

As you have no doubt learned, the Health Department periodically inspects, business licenses expire, and business entities (corporations, limited liability companies and the like) have bi-annual filing requirements. If you fail to keep up with your administrative responsibilities, not only might you have problems with the issuing agency – but, the ABC Board will compound your problems with a ‘cease and desist order.’ If the lapse continues unaddressed, your license can even be canceled.

The moral of the story is of course; renew your business license (every 2-4 years); file your 2-year corporate reports on time; and if you have a conditional C of O, make sure you can get a permanent one issued before it expires. If you don’t do these things, you are putting your liquor license at risk.

Without getting too far into the weeds on technicalities, the law allows the ABC Board after an investigation but BEFORE a hearing, to order any licensee to cease and desist the service and sale of alcohol if they violate any provision of the ABC Law and that the violation has caused or may cause immediate or irreparable harm to the public. DC Code §25-829

Alright, what does that have to do with renewing my BBL or corporate report every couple of years? Good question.

Nowhere in Title 25 of the DC Code (the ABC Law) does it say that a licensee must have a current business license or certificate of occupancy to maintain a license (it does say that you must have those things to qualify for a license). Moreover, it’s not clear why a lapsed business license is, in the view of the Board, an “immediate and irreparable” harm to the public.

Regardless, the Board routinely issues cease and desist orders in these situations. In fact, in 2016, they even adopted regulations, that expressly say that the Board can immediately suspend a licensee who has a lapsed or suspended business license, certificate of occupancy, Health Department certification, Sales Tax Certificate, corporate status, or if you fail to pay a Board ordered fine, or bounce a check to ABRA. See 23 DCMR 809 (2016). To be fair, their rule does require the issuance of a 14-day notice, prior to a cease and desist taking effect – so licensees have the opportunity to cure the violation and renew the BBL or corporation or whatever the issue is. However, a licensee with a problem that is not able to be cured in 14 days, (like a zoning issue that just happened to pop up) finds himself in a precarious situation.

I think there is a serious legal question as to whether the Board overstepped their statutory authority, by adopting the 2016 regulation. But, if you are a licensee, you do not want to be the one that has to foot the bill for a legal challenge to the municipal regulations. Your best course of action is to keep all of your licenses up to date to avoid being on the receiving end of a cease and desist notice from the Board.

If you have received a cease and desist notice, or if you have questions about your rights and responsibilities as a licensee, call or schedule an appointment.