NHSPS Lease Regularisation
If you occupy NHS Property Services premises without a lease, you may have received a letter from NHS England and NHS Improvement urging you to engage with the lease regularisation programme.
The letter highlights three options for you to consider:
Option 1 – Agree a full lease;
Option 2 – Sign a “Rental Agreement Letter”; or
Option 3 – Take a licence to join a digital platform to find and book sessional space rooms.
The letter goes on to say that “GP Practices and Providers are expected to enter open discussions with NHSPS, with a view that by April 2020 all tenants will occupy under one of [these] forms of agreement”.
It also warns that “where it is evident” that there is a “failure to engage”, DHSC and the NHS bodies may seek legal recourse.
What should you do?
Before considering the options, you need to check whether you need to occupy the NHSPS premises on an exclusive or sessional basis? If you occupy rooms on a sessional basis (e.g. on Tuesday and Thursday afternoons) then Option 3 may be worthy of consideration, but this arrangement would not be appropriate in other circumstances. Ultimately, you will need to agree arrangements that work for your Practice.
Assuming your main or branch surgery premises are within an NHSPS building it is almost certain you will occupy on an exclusive basis in return for a rent which is reimbursed under the Premises Costs Directions. If so, how should you approach Options 1 and 2?
Lease, Rental Agreement Letter or the Status Quo?
Exclusive occupiers are urged to formalise their arrangements with a full Lease or, failing that, to sign a Rental Agreement Letter (RAL). NHSE and NHSI seem to accept there may be reasons why a formal Lease is not possible and give disagreements over service charges as an example. In our experience the condition and fitness for purpose of the premises is also a barrier for some practices. If there are good reasons not to sign a lease should you therefore sign a RAL?
If you are occupying your premises exclusively and are paying a rent (even a reimbursed rent), then you may already have a lease albeit one that is not documented. Further you may also have protected business tenant’s rights under the Landlord and Tenant Act 1954.
Caution is therefore advisable before signing up to anything which is not itself a full Lease (e.g. a RAL), as there is a risk that in doing so you may prejudice, or at least muddy, terms and rights which have already been established in law based upon your years of occupation and practice. At the very least, you should consider whether any of the terms in the RAL are more onerous than those which currently prevail.
What will happen if we have reason not to agree a formal lease and do not want to sign an RAL?
Assuming you have an informal lease with rights under the 1954 Act, it is possible your Landlord could commence the lease renewal process under that Act but this would seem to contradict the notion that there are justifiable reasons (such as disputed service charges) which need to be resolved before a formal lease can be agreed. If you do not have 1954 Act rights, then your position may be more exposed.
The letter also highlights that investment and improvement in the premises may be deferred until there is adequate security of tenure to support NHS grants etc. However, signing a RAL is unlikely to increase your security so would doing so help unlock such investment?
Whatever your circumstances, expert legal advice is important to establish your current position before deciding how your Practice should respond to the NHSPS lease regularisation programme.
If you have any queries or would like to discuss these issues further, please contact us