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Rental income

Our branch surgery was built in the 1990s to accommodate an anticipated increase in the population in the area, which has only happened in the past two years. It is much larger than our main surgery. A local private dentist, currently practising from home, wants to rent space in a wing of the branch surgery so he can expand his practice. We receive cost rent on the wing but the community staff who were there have moved out. The part of the premises that the dentist would use represents probably a third of the building. The building's value makes conversion to notional rent ill-advised. How much can we charge in rent and services costs without having to refund the PCT?

You will need PCT permission to rent some of the branch surgery to the dental practice.

First, you could ask for some of the accommodation to be removed from the GMS(or PMS-) recognised accommodation so that part can be rented out. If you do so, then you will lose the portion of cost rent relating to the areas removed.

Second, you could agree to pay any rent to the PCT that you receive from the dental practice so that, in effect, the amount of cost rent you get would be reduced by the actual rent, leaving you in a similar position and the PCT better off.

The rent paid by your tenant will relate only to the basic commercial rent on the property and does not include any service charge or other addition that you may wish to levy as a contribution towards insurance costs, repairs, utility costs and so on.

Such costs need to be charged separately from any rent and clearly designated 'service charge' or similar. They do not have to be offset against your cost rent reimbursement.

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