When does a GP Practice require a Lease

When does a GP Practice require a Lease? Paul Conlan, MRICS, Operations Director RICS Registered Valuer T: 0114 281 5850 I E: pc@gpsurveyors. co. uk I www. gpsurveyors. co. uk I

Simple Rules of Thumb • A Lease is usually required when there are uncommon parties – when 100% of the Property Owners are not 100% of the Practicing GP Contractors. • When the intention for occupation is for a term in excess of three years (Law – a term in excess of three years should be in writing)

What is a Lease? • A Lease is a formal document to regulate the occupation of a building. • In order for there to be a Lease there must be; – Price (The Rent) – Parties (Landlord and Tenant) – Period (Duration of Time – Term of Years) – Property (Building) (Minimum requirements)

Why should I have a Lease? • Legal Requirement for terms in excess of three years to be in writing. • Protection (both Landlord and Tenant) • Clarifies rights and obligations of parties to the Lease (Demise, Rent, Reviews, Insurance, Repairs, Sub Letting, Assignation, Termination) • Defines the Use (restricts unlawful practices) • Helps to avoid costly property Disputes

Benefits of having a Lease (Landlord) • Security of Investment - the right to receive rent from Tenant for a fixed duration of time. • Protects the Investment Value • Transferable • Provides clarity as to rights and obligations • Helps avoid costly property disputes as rights and obligations are stipulated within the Lease.

Benefits of having a Lease (Tenant) • Right to use the Property for a specified term of years. • Right to renew the Lease (Landlord and Tenant Act) • Right to receive NHS rental reimbursement for the duration of the Lease and in accordance with the terms of that Lease (Assumes NHS England approval)

Benefits of having a Lease (Tenant) • GP Contractor requires a secured property to operate an NHS Contract. • NHS guidance suggests that all NHS occupiers within buildings enter into Leases to plan and protect future ongoing patient care. • Facilitates Future Planning – Lease end date can instigate improvement works or a plan to move to a different building (assuming NHS approval).

Benefits of having a Lease (Tenant) • Provides clarity as to rights and obligations • Helps avoid costly property disputes as rights and obligations are stipulated within the Lease.

CQC Requirements • The CQC has recently updated its requirements in respect of property from which CQC registered services are provided. It will now seek evidence that a formal occupation arrangement is in place before agreeing to register a location.

Dangers and Drawbacks of not having a Lease Property Disputes • Unfortunately becoming more common due to significant number of NHS stock continuing to receive Notional Rent when they should be on Actual Rent reimbursement under a Lease (retired GP’s retaining shares in Property – New GP’s preference to be salaried) • Usually costly and can create bad feeling.

Case Example • A property with a GP Practice Tenant and Retired GP Landlord without a Lease is falling short in Statutory and Minimum Standards (Premises Cost Directions). • Who is responsible for improvement works costs? • Why might not having a Lease be an issue?

For additional information and advice contact GP Surveyors on: 0114 281 5850 pc@gpsurveyors. co. uk www. gpsurveyors. co. uk T: 0114 281 5850 I E: pc@gpsurveyors. co. uk I www. gpsurveyors. co. uk I