A fundamental consideration before entering into an NHS Local Improvement Finance Trust (LIFT) lease is the impact that the Health and Social Care Bill could have.
Here are some of the issues that need to be clarified before moving in new LIFT premises:
- PCTs normally take on the landlord's role under the lease of a LIFT building but it is not known who will step into their shoes as landlords if they are abolished on 31 March 2013 - GP consortia, a newly created LIFT company or another third party? The replacement may have a commercial outlook that could impact more expensively on practice tenants.
- What will happen to LIFT practices' rent reimbursement when PCTs go? It is possible an alternative mechanism will be put in place.
- GPs must consider whether the lease terms reflect the current position on the rent funding they get. In future, will there be a lease arrangement under which the LIFT rent payments must be paid first and then reimbursed later?
- Is it worth setting up a limited liability partnership or limited company to hold the LIFT lease? Doing this will limit each GP partner's liability.
- Practices need to consider the implications of taking on a long LIFT lease. Currently GPs accept 25-year leases which can make it difficult to re-negotiate or to modify, expand or reduce their accommodation as needed.
- Try to negotiate 'break' clauses allowing the practice to end the lease after a fixed period of, say, five or 10 years.
- The lease needs to allow for partner changes and include a mechanism for enabling individual GPs' liability to be removed when they leave.
- The lease should set out the rent in detail and clearly state all other costs and service charges and how the sums payable are calculated (and, sometimes, reimbursed). Also, will the landlord or the practice pay the lease-related legal costs?
- Check up on car parking arrangements and restrictions in the lease.
- Will the lease terms allow the practice to use part of its accommodation for non-NHS healthcare provision and private patients?
- If your practice has moved into a LIFT building but has not yet signed the lease, consider whether the proposed terms reflect your current working arrangements. Once the lease is signed, it will usually completely regulate your occupation.
- Check if the proposed lease is subject to other leases granted to the PCT and local LIFT company that could impact adversely on your lease.
Warren Martin is a specialist adviser on LIFT projects at solicitors Boote Edgar Esterkin, www.bootes.co.uk