NHS Property Services Template Lease David Naughten Thursday 22 - - PowerPoint PPT Presentation

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NHS Property Services Template Lease David Naughten Thursday 22 - - PowerPoint PPT Presentation

NHS Property Services Template Lease David Naughten Thursday 22 September 2016 How did we get here? PCT premises occupied by GP Partnerships with no formal arrangements NHS PS inherit 1000s of GP let premises April 13


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NHS Property Services Template Lease

David Naughten

Thursday 22 September 2016

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  • PCT premises occupied by GP Partnerships with no formal

arrangements

  • NHS PS inherit 1000s of GP let premises April ‘13

– “Commercial” approach to Estate management – Split between NHS Estate ownership and Commissioning – “Information gap” – lost staff, no formal arrangements in place, lack of background knowledge as to arrangements

  • The current (NHS) climate

– Partnerships struggling to attract new Partners/existing Partners unwilling to commit to lengthy new lease terms – Tightening of Practice budgets/inability to cover substantial arrears in service charge

How did we get here?

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  • NHS England assistance in the form of:

– Stamp Duty Land Tax paid for – Reasonable legal costs paid for – “Transitional” service charge funding arrangements

  • “Grace period ending 30 November 2017”

What is on offer?

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Main provisions of the “Template Lease”

Issue

  • Long lease term

(typically 25 years) with no break rights

  • Partners potentially

“on hook” for lease

  • bligations for well

beyond remainder

  • f working life

(unless new partners can be convinced to take

  • ver)

Template Lease position

  • Template Lease

includes break right for Practices where they lose their core contract (regardless of whether this is as a result of Practice actions e.g. serving notice to terminate) Does this solve the issue?

  • On the face of it yes

but break right is conditional on: a. The rent having been paid up to date b. Vacant possession given of the premises (legally a potentially complicated area) c. No third parties in

  • ccupation still
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Issue

  • Rent reviews

not directly linked or capped to what is received by way

  • f reimbursed

rent

  • Potential for

Practices to end up with shortfall between rent due and rent reimbursed

Template Lease Position

  • Rent reviews under

template lease are tied in with what a Practice receives by way of reimbursed rent Does this solve the problem?

  • Yes
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Issue

  • Practices faced

with full repairing

  • bligations in

respect of premises that require substantial works/are in a state of disrepair

  • Potential for

Practices to face hefty dilapidations liabilities at the end of the lease term Template Lease position

  • Repairing obligations

to be caveated by reference to a schedule of condition, showing those items that a Practice will not be responsible for repairing Does this solve the issue?

  • Depends on what is

agreed between the parties – template lease states that schedule of condition only to be used where agreed as part of heads of terms

  • Will also depend on

what the schedule of condition covers i.e. is it

  • nly select items or full

schedule of condition

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Issue

  • Service charge

mechanisms provided Practices with no means to challenge what were deemed unreasonable service charges, and no requirement for services charges to be reasonable Template Lease Position

  • Template lease

includes a dispute mechanism and a requirement for service charges to be i) reasonably and properly incurred and ii) services and billing transparent Does this solve the problem?

  • Not necessarily – does not

address the issue of historic arrears that some Practices are facing, which run into the £10,000s

  • Dependent on NHS PS

following the required process (although does give Practice starting point if end up in dispute)

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  • Consider what is on offer

– Take legal advice – Not necessarily the right option for every Practice

What next?

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Contact Details

Title: Solicitor Tel: 0191 226 3647 Email: david.naughten@sintons.co.uk

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Questions?