Author Archives: GP Surveyors Admin

What is a Lease?

A lease is a legal document that regulates the occupation of a building by clarifying the rights and responsibilities of both the owner of the building (Landlord) and occupier of the building (Tenant).

When is a Lease required?

Many GP practices are not aware of when a lease is required. A lease is usually required when there is an uncommon party. An uncommon party would be a GP Partner that has retired or left the practice while retaining an ownership share in the building and/or a GP Partner that has joined but has no intention of purchasing a share in the building (usually an incoming partner has a degree of protection under the partnership agreement).

How can we help?

• GP Premises Lease Creation
  A Surveyor is required to negotiate and agree on heads of terms for the new lease, as the terms of the lease impact upon the rent calculation. Heads of terms are then passed to a Solicitor to draft and register the lease.

• GP Premises Lease Renewal
  The Landlord and Tenant have the right to renew on the same terms as the original lease, except the rent, which should be reset to market level by your Surveyor. A Solicitor will still be required to draft and register the renewed lease.

• Rent Review
  The Landlord and Tenant will require a Surveyor to negotiate and agree to the Market Rent under the Lease and advise and if appropriate, agree to the level of NHS England rental reimbursement.

• GP Lease Consultancy
  We will provide tailored professional advice based on your requirements. Such as reviewing the suitability of your existing lease and providing an expert witness report.

• NHS Approvals
  Most lease work involves discussions with the NHS (and/or their representative) and any lease whether new or varied requires NHS approval that the lease affords them value for money and is consistent with their plans for ongoing continuity of care.

GP Surveyors are leading experts in providing lease advice to the primary care sector, supporting surgeries throughout the UK. With over 19 years of experience, we have a proven track record and understand the intricacies of leases on property occupied by GP’s.

Following a free review of your current lease and an initial telephone consultation, we will be able to define your unique requirements and provide a quotation. Our fee structure is competitive and the basis will be dependent on the service required.

GP leases are a specialist area and it is essential that practices instruct specialist, primary care Surveyors and Solicitors, to undertake such work.

Please contact our expert team for further assistance on GP Leases and Rent Reviews.

GP Premises Leases

Many GP practices are not aware of when a lease is required or how the presence or absence of a lease can impact upon NHS rental reimbursement.

Where all the owners of the property are still practicing General Practitioners (GP) in occupation of the property, the GP Partners are owner occupiers and should receive Notional Rent Reimbursement from NHS England.

When is a lease required?

Generally, you should have a lease where there are ‘uncommon parties’. An uncommon party would include;

• a retired or departed GP who has retained an ownership share in the property;
• any individual who is not a current GP Partner who owns a share of the property;
• any non-property owning GP Partner.

Non-property owning GP Partners generally have a degree of protection and security from the partnership agreement and a lease may not be essential in these circumstances but would probably still be best practice. In addition, the partnership agreement should be robust, up to date and clearly identify the mechanisms for succession (seek advice from a specialist Solicitor). Especially as succession and future planning would seem to be becoming an increasingly complex issue. 

What is a lease?

A lease is a legal document defining the rights, responsibilities and obligations for occupation of property between the owners (Landlord) and the occupiers (Tenant) of the property.

A lease will contain many details including responsibilities for insuring, repairing, maintaining, decorating and will provide clarity around these issues that will help avoid costly property disputes. A lease must, as a minimum, include details on the following;

• Property (Building)
• Parties (at least one uncommon party)
• Period of Time (Lease Term usually in years)
• Price (Rent)

GP Contractors are required to secure a property from which to operate from and provide contracted medical services. The best way of securing premises, if not purchasing a property, is under a lease.

GP Contractors occupying a property under a NHS approved lease should receive “Actual Rent” Reimbursement from NHS England. 

New and varied leases

It is essential that a new or varied lease should be passed to NHS England by the GP Contractors (tenant) for approval to determine that it meets NHS England’s ‘value for money’ criteria. This process must be satisfied before signing any lease and can act as a check mechanism to ensure the proposed agreed terms are fair, reasonable and consistent with leases on other GP premises.

NHS England’s approval of the lease is a commitment from the NHS to reimburse the GP Contractors under the terms of that approved lease for the duration of that lease.

Leases on GP premises should not be or be seen as onerous, as once NHS approval has been secured the lease will attract NHS Recurring Premises Costs Reimbursements to cover the financial liabilities under the lease.

Securing the rights to the building also enables partners to draw salaries, pension contributions and profit shares and to qualify for Improvement Grants including Estates Technology and Transformation Funds (ETTF).

Improvement Grants and ETTF monies will be subject to the abatement regulations within the Premises Cost Directions 2013 and thus the property should be secured for 5, 10 or 15 years for the NHS to be satisfied that it will receive the appropriate return on their financial investment for the level of funds being allocated. If you only have a 5 year lease then it is unlikely that you will qualify for more large scale NHS investment, as this will require to be recouped over a 10 or 15 year period.

If you have any questions or concerns you should discuss your individual needs and circumstances with a specialist healthcare Surveyor, Solicitor and Accountant.

 

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For a long time, there has been uncertainty among GPs and Practice Managers with regards to the time limits placed on GP practices to appeal their Notional Rent.

The Facts: GP surgeries have 3 years to open a dispute from the date that you receive your new reimbursement figure.

Here’s our proven explanation of why this is the case:

The relevant information is detailed within the NHS (GMS) Regulations 2015, Part 12, Section 81 and 83.

Section 81 states that:

“The contractor and [F1NHS England] must make reasonable efforts to communicate and co-operate with each other with a view to resolving any dispute which arises out of or in connection with the contract before referring the dispute for determination in accordance with the NHS dispute resolution procedure (or, where applicable, before commencing court proceedings)..”

This means that NHS England must endeavour to discuss and resolve your Notional Rent appeal at a local level.

If discussions at a local level between your surveyor and NHS England (or their representative) are unsuccessful and the Local Resolution Dispute Procedure (LRDP) has been exhausted, then the matter will be referred to the NHS Litigation Authority (NHSLA) for determination. This must be done within 3 years.

Section 83.4 states:

“Where a party wants to refer a dispute, it must send a request under paragraph (3) to the Secretary of State before the end of the period of three years beginning with the date on which the matter giving rise to the dispute occurred or should reasonably have come to the attention of that party.”

The Proof: Here at GP Surveyors, we have encountered a number of cases recently where NHS England has refused to enter into local Notional Rent negotiations with us (on behalf of our GP clients) because the practices have not raised the challenge within 3 months of receiving their new Notional Rent figure.

NHS England stated that this was because the Notional Rent time limits of 3 months were outlined in a letter to the GP practices following their reviews:

“Should you dispute the above determination, this should be indicated to me in writing at the above email address within three months of the date of this letter. This should be accompanied by substantive evidence of your opinion of the current market rent of the premises together with a breakdown of that figure and at least two appropriate CMR comparables for your practice locality provided by an expert advisor appointed by your practice.”

GP Surveyors contested this and had to take the cases to the NHSLA for a determination. In October 2015 The NHSLA confirmed that GP practices do in fact have three years to refer a dispute to the Secretary of State (NHSLA) due to the reasons outlined above.

They also ruled that:

“any timescale that is unilaterally imposed by one party and that restricts the ability of the parties to engage in local dispute resolution is likely to be inconsistent with the Regulations in so far as it limits the parties’ abilities to make every reasonable effort to communicate and co-operate with a view to resolving the dispute before referring the dispute for determination in accordance with the NHS dispute resolution procedure as set out in paragraph 99(1) of Schedule 6 of the Regulations.”

Moreover, NHS England were instructed to appoint a representative within 30 days to discuss and negotiate the Notional Rent cases with GP Surveyors (on behalf of our clients).

For further information on your surgeries Notional Rent review

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GP Surveyors has won 5 breakthrough cases which confirm that GP practices contractually have 3 years in which to challenge their Notional Rent reimbursement, not 3 months (which was argued by NHS England).

In addition to this, there are 4 cases pending which are expected to have a similar outcome – preventing NHS England from imposing non-contractual time limits on Notional Rent reimbursement appeals.

Paul Conlan, Operations Director at GP Surveyors, explains:

“Over the past year we have taken on an increasing number of Notional Rent appeals (on behalf of our GP clients) where NHS England has refused to enter into local negotiations. NHS England reasoned that this was because the practices had not opened the disputes within the 3 month time frame which was outlined in letters to the practices following their reviews.

However, here at GP Surveyors, we have always reaffirmed that GP practices have 3 years to appeal their Notional Rent following a review due to the regulations outlined within the GMS contract (NHS GMS Regulations 2004) – specifically Schedule 6, Paragraphs 99 and 101.”

Paragraph 99 states that:

“the contractor and the Primary Care Trust must make every reasonable effort to communicate and cooperate with each other with a view to resolving the dispute, before referring the dispute for determination in accordance with the NHS dispute resolution procedure.”

Conlan explains:

“This means that NHS England must endeavour to discuss and resolve Notional Rent appeals at a local level. If an agreement cannot be reached, then the matter can be referred to the NHS Litigation Authority (NHSLA) to follow the NHS Dispute Resolution Procedure (LDRP).”

 

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