DR Solicitors Blog

NHS Property Services lease problems – is a solution in sight?

[fa icon="calendar"] May 7, 2019 11:05:49 AM / by Bethan Dodd

Bethan Dodd

If you are a practice which occupies an NHSPS building, then you may well have received a letter from NHS England and NHS Improvement in April which encourages GPs to regularise their leasehold and service charge arrangements with NHS Property Services.  The letter states that it is in the best interests of both Landlord and Tenant to have clarity and certainty on occupancy arrangements, but also threatens ‘legal recourse…where it is evident that GPs and Providers are failing to engage’.

You are now being offered 3 options:

  • a full lease;
  • a rental agreement letter (as an interim measure); and
  • a licence for you to join Open Space.

To help you decide which of the 3 options might be best for you, we have summarised our thoughts on the legal implications below. However, our views expressed in previous blogs about NHSPS remains the same, and ‘doing nothing’ may remain an option for some practices if the terms on offer are not sufficiently attractive.

Option 1: a lease

Whilst the clarity and certainty of a lease is generally the preferred outcome, this is only the case if any lease arrangement is sustainable. This is particularly the case for building maintenance costs and other ‘non rent’ costs associated with a lease. 

Many readers will be aware of the ongoing service charge issues between NHSPS and many GP practices with large, and in some cases, unsustainable service charge increases being imposed by NHSPS as landlord.  This has been and remains one of the major obstructions to practices being able to enter into a lease with NHSPS and it is important that these issues are resolved before any long term lease arrangement is put in place.   In case you missed it, you can read our blog on what you can do about inflated NHSPS service charges.

Whilst the letter does acknowledge the ongoing problems with service charges, it doesn’t offer any clear steps or processes which might resolve the issues.

Option 2: a rental agreement letter

A ‘rental agreement letter’ is not a legally defined term, so there is little indication of what rights and obligations it might contain. The letter states that a ‘rental agreement letter’ would only be an interim measure, giving clarity on certain occupancy terms (such as rent, payment terms etc) whilst long term lease terms were negotiated.  We are concerned that such a document could override your current occupancy status and any rights you may have accrued over time and thereby prejudice your negotiating position,  so would certainly advise anyone considering signing such a letter to seek legal advice first.

Option 3: licence to use NHS Open Space

NHS Open Space is a ‘room hire’ service, allowing users to book rooms on a sessional basis.  Users would have no right to use the space beyond the session for which they have booked it.  The service might be able to compliment your existing premises if you have a short term need for extra space perhaps to run a temporary additional clinic or a staff training day, but it is not a substitute for your main surgery premises as it conveys no security of tenure. There is also no detail about how such an arrangement could be reimbursed through the NHS premises funding, and we are not aware of any current standard mechanisms for this.

Next steps:

NHSPS are clearly minded to seek to resolve this ongoing problem, so now may be the time for practices in NHSPS buildings to enter (or re-enter) into a dialogue. We sense there is a will to resolve the service charge issues on a case by case basis, and we have seen a number of positive outcomes.

When negotiating, make sure you take professional advice from a specialist solicitor and a surveyor. Remember that whilst you may not have a written lease, you still probably have a tenancy with the important tenant protections that can come with this.  Knowing your legal rights can strengthen your negotiating hand and help ensure your lease is drawn up on a sustainable footing from the start.

 

For a free initial chat about this or any other legal concerns you might have, please contact Bethan Dodd  b.dodd@drsolicitors.com or Daphne Robertson d.robertson@drsolicitors.com  or call us on 01483 511555.

Download this article in PDF format 

Have a question? Send us a message using the form below and one of our team will get back to you shortly.