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California Frequently Asked Questions

Liquor License Escrow Requirements

If there is any purchase price or consideration in connection with the transfer of a business operated under a retail license, an escrow must be established with some person, corporation, or association not a party to the transfer, before the filing of such transfer with the Department (See Sections 24071.1, 24073, 24074, 24074.1, 24074.3, and 24075 of the Alcoholic Beverage Control Act). The full amount of the purchase price or consideration must be placed in escrow.  

Escrow agreements must provide for payment only after the transfer of the license is approved by this Department. Section 24074.3 requires that the applicant, within 30 days of application, furnish the Department a statement, under penalty of perjury, that the purchase price or consideration has been deposited with the escrow holder.

The applicant shall also submit a copy to the transferor and a copy to the escrow holder. In this connection, a misrepresentation may be grounds for denial of the license or subsequent revocation of the license if issued.

Consideration includes cash, checks, promissory notes, or other items of value which have been agreed to be paid to the transferor for the license, inventory, fixtures, leasehold interest, realty, good will, covenant not to compete, or other property connected with the licensed business.