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 – “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
What is on offer? • 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”
Main provisions of the “Template Lease” Issue Template Lease position Does this solve the issue? • Long lease term • Template Lease • On the face of it yes (typically 25 years) includes break right but break right is with no break rights for Practices where conditional on: they lose their core • Partners potentially a. The rent having been contract (regardless of “on hook” for lease paid up to date whether this is as a obligations for well b. Vacant possession result of Practice beyond remainder given of the premises actions e.g. serving of working life (legally a potentially notice to terminate) (unless new complicated area) partners can be c. No third parties in convinced to take occupation still over)
Template Lease Position Issue Does this solve the problem? • Rent reviews • Rent reviews under Yes • not directly template lease are tied linked or capped in with what a Practice to what is receives by way of received by way reimbursed rent of reimbursed rent • Potential for Practices to end up with shortfall between rent due and rent reimbursed
Issue Template Lease position Does this solve the issue? • Practices faced • Repairing obligations Depends on what is • with full repairing to be caveated by agreed between the obligations in reference to a parties – template lease respect of schedule of condition, states that schedule of premises that showing those items condition only to be require substantial that a Practice will used where agreed as works/are in a not be responsible for part of heads of terms state of disrepair repairing Will also depend on • • Potential for Practices to face what the schedule of hefty dilapidations condition covers i.e. is it liabilities at the only select items or full end of the lease schedule of condition term
Issue Template Lease Position Does this solve the problem? • Service charge • Template lease • Not necessarily – does not mechanisms includes a dispute address the issue of provided mechanism and a historic arrears that some Practices with no requirement for Practices are facing, which means to service charges to be i) run into the £10,000s challenge what reasonably and • Dependent on NHS PS were deemed properly incurred and following the required unreasonable ii) services and billing process (although does service charges, transparent give Practice starting point and no if end up in dispute) requirement for services charges to be reasonable
What next? • Consider what is on offer – Take legal advice – Not necessarily the right option for every Practice
Contact Details Title: Solicitor Tel: 0191 226 3647 Email: david.naughten@sintons.co.uk
Questions?
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