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Premises exit strategy

Can you advise us on drawing up an agreement for an exit strategy from our GP-owned premises? Is it advisable to use market value at the time of valuation, when a partner wishes to sell their surgery share?

I recommend getting an assessment of the surgery's market value when partners join or leave the practice. Market value is an internationally recognised description and is fully defined within the Royal Institution of Chartered Surveyors' Appraisal & Valuation Manual.

If a valuer is instructed to assess market value, they will take into account such things as the current use of the premises and its potential for alternate uses and redevelopment - as offices or homes, for example. But it will exclude any personal element relating to the practice's occupation, such as the level of premises funding (reimbursement).

Because of this, some partnership agreements include special assumptions for assessing market value, such as 'market value assuming that the permitted use is restricted to a surgery or health centre'. This is designed to exclude any inflated value redevelopment may bring.

Or if the GPs receive cost rent (borrowing costs reimbursement) the agreement might state: 'Market value with the assumption that the level of notional or cost rent will remain but excluding any element of goodwill.'

For further advice about this visit the BMA's website (www.bma.org.uk) which has specific premises guidance.

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