Selling a care home – the legal aspects

Selling a care home requires input from specialist legal advisors who are experts in business law and social care law. In order to ensure that your sale goes through smoothly you should consider the following:

Due Diligence

The buyer and its advisors will undertake ‘due diligence’ on the care home. This can be a time consuming and paper heavy exercise! It is therefore critical to be organised with it from the outset. Have you got all your service contracts, licences and CQC paperwork in order? What about employment contracts and premises documents? You should also undertake due diligence of your own on the buyer. Does the buyer have a track record in the sector? How will the buyer be funding the purchase? Will you need guarantees from third parties if the buyer is a relatively new business?


If you operate the care home through a company structure, you should take tax planning advice on whether it would be best to sell the shares in your company or for the company to sell the business of the care home to the buyer. This may depend on factors such as whether your company owns any other businesses or assets. It is critical to map such things out from the outset in order to avoid complications further down the line.

Local Authority contracts

If places at the home are funded by the local authority, there will be local authority contracts to think about as part of the sale. Depending on the structure of your sale, these contracts may need to be transferred to the buyer and you will need to engage with your local authority on this so that the transfer of the contracts dovetails with the sale process.


Faisal Dhalla, Partner