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Does your GP practice need a lease?

Does your GP practice need a lease?

31st January 2017

It is important to review the ownership structure of your GP practice and consider the need for a lease.

GP Surveyors suspects that a reasonable proportion of the current owner/occupier stock should actually be held under a lease.

Many GP practices are not aware if they require a lease.  As a rule of thumb, you need to establish if 100% of the owner is 100% of the occupier?  If there is an uncommon party, then a lease to formalise the situation would be best practice.

Scenario:  The GP premises are still owned by two retired partners of the practice.  Should the current partners take a lease?

Yes.  If a formal lease isn’t in place, the basis upon which the current partners occupy the premises is uncertain.  This could lead to potentially expensive legal disputes with the property owners. Occupation of the premises for the long term is not certain and responsibilities for repairs and maintenance are not defined.

Scenario: Should a lease be granted where the property owners are also the partners in the practice?

In this instance a lease cannot be granted as the landlord and the tenant are the same people.

Scenario: The GP premises are owned by four current partners.  A new partner is joining the premises but will not be a property owner.

It would be best practice to have a lease in place, decisions and arrangements around the property can be difficult to manage.  Ideally, any new equity partners should take an ownership share of the property. Where this isn’t possible, all incoming partners should sign a lease.

Here, a lease should be granted by the four property owning partners to themselves, and the fifth partner.

If you are considering entering into, or renewing a lease you need to seek specialist advise from a property professional and lawyer with expertise in GP premises and contracts.