Perfecting a Lien on a Florida Liquor License

by Holland & Knight LLP

The economy continues to improve, albeit slowly. With improving market conditions comes the opportunity for hospitality businesses, such as restaurants, bars, nightclubs and liquor stores, to emerge and grow. These new and growing hospitality businesses may seek new money or offer new collateral for existing loans or lines of credit. This article provides a brief overview of the process and pitfalls for creditors to perfect a lien on a Florida retail alcoholic beverages license ("AB license").

Not All AB Licenses Are Created Equal

The Florida Division of Alcoholic Beverages and Tobacco (the "division") issues all state AB licenses. An AB license is a creature of statute granting a privilege to the licensee.1 The licensee's interest in an AB license is a general intangible but not like other general intangibles2 because the government has total control of its use and issues it as a privilege, not as a matter of right.3

Not all AB licenses however, are created equal. For example, some allow retailers, such as convenience stores, to sell beer and wine to be carried out in sealed containers, while other AB licenses allow retailers, such as small cafés, to provide beer and wine for consumption on-site. Still other AB licenses even allow qualifying restaurants to sell beer, wine and liquor so long as they meet certain minimum requirements including, for example, revenues from the sale of alcoholic beverages do not exceed 49 percent of the restaurant's total revenue.4

The division does not limit the number of most AB licenses issued under these and other similar categories.5 Therefore, there is no outside market value for these licenses because any qualified applicant, meeting the AB licenses' minimum requirements, can apply and obtain them. Consequently, a creditor should not accept most AB licenses as collateral.

On the other hand, the division limits AB licenses commonly referred to as quota liquor licenses. Quota AB licenses are highly coveted and generally allow the sale of beer, wine and liquor for carry-out in sealed containers or for consumption on-site or both (subject to zoning). And while quota AB licenses have some restrictions, they do not have, for example, minimum food-to-alcohol revenue ratios, minimum building square footage requirements, or many of the other restrictions commonly found in non-quota AB licenses. Depending on the Florida county, quota AB licenses bear a 4COP, 5COP, or 3APS designation. The "quota" reference is derived from the statutory restriction of Florida Statute §561.20(1) that prohibits the issuance of quota AB licenses at a rate of more than one AB license per 7,500 residents within the territorial limits of each county. Per the statute, when there is a 7,500-person increase in population then there should be an additional quota AB license issued.6 New quota AB licenses are issued via a yearly lottery process.7 The division, via the yearly lottery, also reissues active quota AB licenses revoked by the division or relinquished by the licensee.

The statutory limitation upon the number of quota AB licenses issued by the division creates a demand for these licenses and thus a transferable value. Factors such as population growth and size, location, and the presence of a strong hospitality industry affect the quota AB license's market price and can range from $15,000 to more than $500,000.

Florida Statute Provides the Exclusive Means of Perfecting a Lien on an AB License

Because the government issues AB licenses as a matter of privilege, and the government has total control of its use, Florida Statutes provide the exclusive means of perfecting a lien on an AB license.8 Section 561.65 (4) provides, in relevant part:

In order to perfect a lien or security interest in a spirituous alcoholic beverage license which may be enforceable against the license, the party which holds the lien or security interest, within 90 days of the date of creation of the lien or security interest, shall record the same with the division on or with forms authorized by the division, which forms shall require the names of the parties and the terms of the obligation ... .

Thus, filing the appropriate form with the division is sufficient and no duplicate filing under the Uniform Commercial Code (UCC) is necessary.9The division's website provides the approved form titled Application for Mortgagee's Interest in Spirituous Alcoholic Beverage License.10 The division must receive the approved form and fee within 90 days of the date of the creation of the lien however.11 "The fact that the [division's] acceptance takes place more than [90] days after the date of creation of the lien is immaterial."12 Nevertheless, failure to strictly comply with Section 561.65(4) makes the lien unenforceable against the licensee.13

Due Diligence Is Required Before Accepting an AB License as Collateral

Before a creditor considers whether to accept an AB license as collateral, the creditor should conduct a search of the relevant AB license file for existing liens and equitable interests in the license. AB license files are public records available for examination.14 The division's main office in Tallahassee and the field office responsible for the county where the AB license is located maintain AB license files. The creditor should first request a formal lien search utilizing the division approved form titled Request for Alcoholic Beverage License Lien Search.15 The formal request will cause the division to conduct a lien search of the AB license file and provide to the requester copies of all recorded liens and security interests.16

The creditor should then determine if there are agreements creating an equitable interest in the AB license file. Under Rule 61A-3.017(5) of the Florida Administrative Code, all "agreements concerning ownership or operation of an alcoholic beverage license shall be attached to and submitted with each new or transfer application for a license, including, but not limited to, management agreements, options to purchase, and retailer franchise agreements. Any such agreements coming into existence following the issuance of a new or transfer license shall be submitted to the Division within ten (10) days of execution." Courts interpret this rule to give notice to all creditors that an agreement creating an equitable interest in an AB license could exist and that special inquiry should be made to the division for such agreements.17 Accordingly, the creditor should review any agreements in the AB license file for provisions that, for example, create a contractual obligation for the borrower/licensee to transfer the AB license to a third party at the expiration of lease or management agreement.18


A quota AB license can provide a creditor security against borrowers seeking new money or offering new collateral for existing loans or lines of credit. Strict compliance with Florida Statute §561.65 and due diligence is required.

A version of this article,"Perfecting a Lien on a Florida Liquor License" by Luis J. Gonzalez, Esq., originally appeared in the Orange County Bar Association's The Briefs, January 2013, Vol. 81 No. 1. It is published here by permission of the Orange County Bar Association. All rights reserved.   


1Lachance v. Desperado's of Holly Hill, Inc. 760 So. 2d 1023,1025 (Fla. 5th DCA 2000).  

2Under the U.C.C., "general intangibles" means any personal property (including things in action) other than goods, accounts, chattel paper, documents, instruments and money. U.C.C. §9-106.

3U.S. v. McGurn, 596 So. 2d 1038, 1041 (Fla. 1992). 

4See e.g. Fla. Stat. §561.20(2)(a)

5Fla. Stat. §561.20(2)(a)

6Fla. Stat. §561.20

7Fla. Stat. §561.20(1)

8U.S. v. McGurn, 596 So. 2d 1038, 1041 (Fla. 1992). 


10 ABT-6022 – Division of Alcoholic Beverages and Tobacco Application for Mortgagee’s Interest in Spirituous Alcoholic Beverage License)

11Splash Entertainment, Inc. v. Sons of Ireland, Inc., 867 So. 2d 423, 426 (Fla. 3d DCA 2004).


13Dery v. Occhiuzzo and Occhiuzzo Enterprises, Inc., 771 So. 2d 1276, 1278 (Fla. 4th DCA 2000).

14Personal information in AB license files, such as Social Security numbers, are redacted and not disclosed.

15DBPR ABT – 6023 Division of Alcoholic Beverages and Tobacco Request for Alcoholic Beverage License Lien Search

16Fla. Stat. §561.65 (4). 

17Lachance, 760 So. 2d at 1026.

18See Lachance, 760 So. 2d at 1026 (affirming trial court order that denied creditor's claim to foreclose lessor's interest in AB license and finding that lessor's interest in the license was the ability to regain title or ownership of the license at the end of the lease and that section 561.65(4) did not require lessor to record this type of equitable interest with the division).


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Holland & Knight LLP | Attorney Advertising

Written by:

Holland & Knight LLP

Holland & Knight LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.