[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.grossmcginley.com\/resources\/news\/the-h-license-conundrum-r-you-ready-to-convert\/#BlogPosting","mainEntityOfPage":"https:\/\/www.grossmcginley.com\/resources\/news\/the-h-license-conundrum-r-you-ready-to-convert\/","headline":"The ‘H’ License Conundrum: ‘R’ You Ready to Convert?","name":"The ‘H’ License Conundrum: ‘R’ You Ready to Convert?","description":"Throughout the pandemic, Pennsylvania has seen a lot of changes with respect to the way liquor licensees […]","datePublished":"2022-04-08","dateModified":"2022-04-08","author":{"@type":"Person","@id":"https:\/\/www.grossmcginley.com\/resources\/author\/jason-ulrich\/#Person","name":"Jason Ulrich","url":"https:\/\/www.grossmcginley.com\/resources\/author\/jason-ulrich\/","identifier":50,"image":{"@type":"ImageObject","@id":"https:\/\/www.grossmcginley.com\/wp-content\/uploads\/2021\/02\/Jason-A-Ulrich-headshot-150x150.jpg","url":"https:\/\/www.grossmcginley.com\/wp-content\/uploads\/2021\/02\/Jason-A-Ulrich-headshot-150x150.jpg","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Gross McGinley, LLP","logo":{"@type":"ImageObject","@id":"https:\/\/www.grossmcginley.com\/wp-content\/uploads\/2017\/10\/logopng-00436945-e1531508982151.png","url":"https:\/\/www.grossmcginley.com\/wp-content\/uploads\/2017\/10\/logopng-00436945-e1531508982151.png","width":600,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/www.grossmcginley.com\/wp-content\/uploads\/2021\/03\/liquor-law-allentown-pa.jpg","url":"https:\/\/www.grossmcginley.com\/wp-content\/uploads\/2021\/03\/liquor-law-allentown-pa.jpg","height":800,"width":800},"url":"https:\/\/www.grossmcginley.com\/resources\/news\/the-h-license-conundrum-r-you-ready-to-convert\/","about":["News"],"wordCount":709,"articleBody":"Throughout the pandemic, Pennsylvania has seen a lot of changes with respect to the way liquor licensees have had to operate their businesses. We\u2019ve seen the expansion of \u201cto go\u201d mixed drink sales, expanded licensing premises permits (outdoor dining), and changes in enforcement. The bulk of these changes had their most direct impact on \u201cR,\u201d restaurant, and \u201cE,\u201d eat out, license holders.That said, there is one change that went into effect during the pandemic that was limited to the humble \u201cH\u201d license. In fact, these changes were limited to a very specific subset of \u201cH\u201d licenses. But, to those \u201cH\u201d license holders impacted by this change, will have a very unique opportunity to modify their \u201cH\u201d license permanently into an \u201cR\u201d license.\u00a0Often overlooked, the \u201cH\u201d or hotel license is not subject to the Pennsylvania county liquor license quota, and so can be an attractive option to obtain liquor sales for a business owner.\u00a0 Unfortunately, for someone seeking a liquor license, an \u201cH\u201d license has the rather obvious downside of being required to have rooms in which guests can reside.Oddly, due to regulation back in 2006, a class of \u201cH\u201d licenses exists where there is no guest room requirement. If the owner of the \u201cH\u201d license applied to the Pennsylvania Liquor Control Board (PLCB) for a waiver during the designated time period, the \u201cH\u201d license standard requirement for guest rooms was abolished. These unique \u201cH\u201d licenses are functionally equivalent to an \u201cR\u201d license in many ways. The issue for many of these modified \u201cH\u201d licenses was that the waiver could not be transferred away from the existing premises via a place-to-place transfer. Therefore, if a transfer occurred, the room waiver was not valid on the new property and the \u201cH\u201d license once again required guest rooms.\u00a0However, thanks to Act 125, and the privileges granted therein, if you are the holder of an \u201cH\u201d license\u2014and applied to remove your guest requirements (these were typically allowed for licenses that were grandfathered in, and were in existence prior to 1949), you may be able to convert your \u201cH\u201d license into an \u201cR\u201d license without any of the above restrictions.For these \u201cH\u201d license holders, there are a few potential pitfalls of which you should be aware. First, the \u201cH\u201d licensee must meet the statutory requirements of 47 P.S. Section 4-461(c)(8) concerning the above-noted viability for transfer in Act 125. Second, the \u201cH\u201d licensee must have sought to remove the guest restrictions prior to Jan. 1, 2019, as required by 47 P.S. Section 4-461(c)(9) or 47 P.S. Section 4-461(c)(9.1). Third and finally, the license cannot be located within the city of Philadelphia.If these conditions are met, one of the above lucky \u201cH\u201d license holders can submit an application through PLCB+, along with a one-time payment of\u00a0 $30,000 and convert their liquor license into an \u201cR\u201d license.However, there are a few additional restrictions that might give pause to someone considering this option. If you were to transfer this newly converted license within a period of five years after the conversion, an additional transfer fee will be due to PLCB in the amount of $30,000 or 25% of the sale price, whichever is greater. Moreover, this option expires on Jan. 24, 2023, in accordance with 47 P.S. 4-461(c)(9.2), so time is of the essence in this decision.The conversion of an \u201cH\u201d license to an \u201cR\u201d license has the obvious benefit of creating a more moveable, and possibly significantly more valuable license. Unfortunately, it may also have the effect of reducing the value of the real estate associated with the license.The determination as to whether this conversion is right for you is a question you should discuss with an experienced liquor license attorney.Jason A. Ulrich, a partner\u00a0at Gross McGinley, assists business owners in obtaining and transferring liquor licenses from the Pennsylvania Liquor Control Board. He provides legal counsel in the areas of land use, zoning, real estate and construction matters, and has served in the capacity of the solicitor to several municipal entities throughout Pennsylvania.\u00a0Contact him at\u00a0JUlrich@GrossMcGinley.com or 610-871-1352. Article first appeared in the Legal Intelligencer; https:\/\/www.law.com\/search\/?q=Jason+A.+Ulrich&source=falcon&startDate=&endDate=&button-search=Search; March 2022"},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Resources","item":"https:\/\/www.grossmcginley.com\/resources\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"News","item":"https:\/\/www.grossmcginley.com\/resources\/\/news\/#breadcrumbitem"},{"@type":"ListItem","position":3,"name":"The ‘H’ License Conundrum: ‘R’ You Ready to Convert?","item":"https:\/\/www.grossmcginley.com\/resources\/news\/the-h-license-conundrum-r-you-ready-to-convert\/#breadcrumbitem"}]}]