The practice premises are still owned by two retired partners of the practice.  Should the current partners take a lease?

Yes.  If there is no proper lease in place then the basis upon which the current partners occupy the premises is uncertain, which could lead to potentially expensive disputes with the property owners.  For example, who is responsible for repairing the roof of the property?  Who is responsible for maintaining the boiler?  In addition, the current partners do not have any certainty that they will be able to use the premises in the longer term.

The practice premises are owned by the three current partners.  A new partner is joining the premises, but she will not be a property owner.  Should a lease be granted?

Ideally new equity partners should take an ownership share of the property.  Property arrangements can become more complicated to manage if this is not the case.  If this is not agreed for any reason then, from the perspective of the property owning partners, it would be better to put a lease in place, in order to ensure that the arrangements are placed on a proper legal footing.  This can also avoid setting a precedent for more partners coming into the partnership in future without signing up to a lease.  The lease should be granted by the three property owning partners to themselves and the fourth partner.  From the perspective of the incoming partner it is not strictly necessary to take a lease, as the partnership deed will either expressly or by implication give her a licence to use the premises to carry out her responsibilities as a partner.  This will be the case even if there is no partnership deed in place.

Should a lease be granted where the property owners are also the partners in the practice?

A lease cannot be granted in these circumstances because the landlord and the tenant are the same people.  It is not possible in law to grant a lease to yourself.

Is Stamp Duty Land Tax payable on the grant of a lease? 

Potentially, yes.  The amount payable depends on the term of the lease and the rent.  Stamp Duty can be significant so it is important to calculate the tax liability early on in the process.

A Surveyors view

Paul Conlan, Operations Director of GP Surveyors suspects that, “a reasonable proportion of the current owner/occupier stock should actually be held under a lease.”

Paul continues, “Many GP practices are not aware if they require a lease.  As a rule of thumb, you need to establish if 100% of the owner is 100% of the occupier?  If there is an uncommon party, then a lease to formalise the situation would be best practice.  

A lease is a formal document to regulate the occupation of the building.  It is designed to clarify responsibilities and obligations of both parties (landlord and tenant), providing legal protection that should assist in avoiding costly legal disputes.

If you are considering entering into, or renewing a lease you need to seek specialist advise from a property professional and lawyer with expertise in GP premises and contracts.”

Please contact Sam Hopkins for further information on 0208 780 4776.

How else can we help?

Whether you are tackling HR or premises issues, embarking on a new surgery development project, regularising your partnership agreement or facing a CQC inspection, Capsticks' team is on hand to support you, and to provide practical solutions at extremely competitive rates, using our many years of experience in the healthcare sector.

Visit www.capsticks.com/gps to meet our team and download our brochure for a full description of our services.