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Relocating a GP practice and avoiding the legal pitfalls

Partnership agreements and employee contracts must be addressed when relocating to new premises, writes Jean Walker

Lease negotiation will involve ensuring eligibility for reimbursable rent (image: iStock)
Lease negotiation will involve ensuring eligibility for reimbursable rent (image: iStock)

Relocating premises can be a daunting prospect for general practices. GPs are often caught between the need and desire for better facilities to treat and care for their patients and the seemingly insurmountable red tape and legal paperwork required to arrange a relocation.

This has always been the case, but following the abolition of PCTs at the end of March, many GPs are now faced with the issue of revising agreements, partnerships and even premises leases as new measures come into effect.

Partnership structure

Relocating is difficult at the best of times, but these changes mean combining the challenges of running a small business around the day-to-day commitments of patient care.

In business circles, a maxim many owner managers adhere to is that business owners must work on the business as much as they do in the business, and the same is true for GPs, faced as they are with increased commissioning and management duties. Time is of the essence and these issues, if not handled efficiently, can impact on time previously dedicated to patients.  

When it comes to these increased responsibilities, there are a number of areas of which GPs need to be aware, which all have an impact of the running of a successful surgery. It is imperative partnerships are structured to afford individual protection when it comes to business liability, putting partnership agreements in place to avoid internal business disputes, as well as making agreements between practices to provide services such as ‘out of hours’ surgeries.

It is important to look at employee contracts, where hours of work are already agreed and which need attention if opening hours change and staff are required to work at different times.

Case study

An example where many of these issues came into play was a recent lease negotiation at Springfield Medical Centre, Eccles. The surgery, a partnership made up of six GPs, needed to terminate the existing lease and create a new agreement to relocate from the current property to a new, purpose-built facility.

The lease previously in place was a signed-but-undated draft, and lacking the legal protection necessary. Negotiation of a new lease was needed that would qualify for reimbursable rent from the government and identify changes needed to the partnership agreement.

It was essential the build was in accordance with pre-arranged standards of the valuation office agency guidelines, ensuring that the build was to the GPs’ expectations as well as qualifying for reimbursable rent.

The rent needed to bewholly reimbursable otherwise the GPs would have to find the extra funds out of their usual contract monies. Qualification is dependent on the valuation office, which inspects at the end of the build and agree that the standards have been achieved.

In order to protect the GPs, Springfield Medical Centre appointed an expert to ensure the technical requirements they had agreed with developers were embodied in the agreement for the lease. This meant that they did not need to take the lease if the build was not suitable.

In this instance it was also important that, with six GPs at different stages of their careers, all the doctors in the surgery were protected in the eventuality of retirement, so no individual doctor was left in a position where they’d be unable to retire due to post-retirement liability under the lease. To accommodate this, we advised amendments to the partnership agreement, where it wasn’t possible to alter the lease to protect those partners.

Thus, indemnities were written into the agreement in order to ensure all GPs were in as similar a position as possible, in that some, but not all, GPs would be eligible to retire with no further liability to the lease.

When looking to relocate, or indeed carry out any significant legal work that impacts a partnership, careful planning is essential. The time pressures facing those wishing to move, as they divide more time between patients and commissioning responsibilities, means that engaging outside expertise is a must.

In this new world of GP commissioning, doctors are finding themselves with increased management responsibilities and assuming they can, or should, do everything, is not the right approach due to the complex nature of each issue.

Specialist legal, property and financial advisors are now a necessity and in many cases can become an extension to the practice’s team. This will allow the doctors to focus on what they have trained for. 

Key points to address

  • Partnership agreements need to be structured to afford individual protection when it comes to business liability.
  • Scrutinise employee contracts for issues regarding location and changes to working hours.
  • Ensure premises are built to specification in order to qualify for reimbursable rent from the government.
  • Jean Walker is SME business services partner at law firm SAS Daniels LLP. http://www.sasdaniels.co.uk/

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