This week I have spoken to three practices which have decided to take on a new partner, and a partner who has decided to go back to being a GP. The premises can cause some interesting complications.
In the old days you could extend or develop your surgery with grants or savings, and also get a rent increase on the extension. Now, if you accept the grant, you don’t get the rent for 10 years. So what do you do if you have a partnership change in the 10 years?
Premises are usually valued on a multiple of the rent – but which rent should be used, the normal rent or the temporarily abated rent? It will depend on where you are in the 10-year abatement period, and I presume how long a partner intends to remain with the practice.
The problem is that the rent does not gradually increase to its new level, it jumps up after 10 years.
I think I will bounce this back to the practice solicitors and let them pore over the practice agreement for a solution!