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

NHS Property Services Template Lease

David Naughten

Thursday 22 September 2016

• 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?

• 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?

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

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

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

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)

• Consider what is on offer

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

What next?

Contact Details

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

Questions?