Is your GP practice rent review due? – How can BWHS help?

Are you a tenant whose landlord has instigated a rent review? Or are you a landlord wanting to instigate a rent review with your tenant? Either way, we can help!

Some GP Practices rent their space from a landlord and will have a Lease for their occupation or at least they should! Surgeries that are Leased receive reimbursement from the NHS that should cover the cost of their rent but be no higher than the actual lease rent paid except if they qualify for a retention of rent which is explained below.

Types of Leases

Any surgery lease should clearly set out the areas that are permitted to be occupied and explain the obligations of the Practice as ‘Tenant’ in terms of repairing, maintaining etc.

The two main types of leases are:

  • An FRI lease is where the Tenant takes on responsibility to repair and maintain the entire property including external areas, fabric of the building and structural parts of the building.

 

  • A TIR Lease is where the Tenant takes on responsibility to repair and maintain internal aspects only, and the Landlord takes on responsibility for the external and structural elements.

If a practice has an FRI lease, we can of course check the type of lease for you for free, then they should be able to retain a % of the rent they pay the landlord to cover the costs of any maintenance required. Standard is 5% for a purpose built and 7.5% for a converted surgery.  This means the Actual rent paid by the Tenant under an FRI Lease should be 5/7.5% lower than the reimbursement they receive from the NHS.

Lease Rent Reviews

Surgery leases usually contain rent review clauses which set out the basis/mechanism of the review, i.e. market rent reviews or RPI.  As we said above, we can always check a surgery lease free of charge to advise on this. See below a guide for the general rent review process for a standard market rent review:

  1. Landlord issues a rent review notice to the practice seeking a rent review at a proposed level.
  2. Tenant can either accept the proposed rent, which can be very risky without guarantees that it will be fully reimbursed by the NHS. Or appoint an agent, BWHS, to negotiate with the landlord on your behalf, this would be at the tenant’s cost.
  3. Once a rent is agreed between the landlord and tenants/agents a rent review memorandum (RRM) is signed and sent off to the NHS along with a completed CMR1 form from the practice.
  4. The NHS will then provide their own opinion of rent via the District Valuer and submit it to the practice through a CMR4 form.
  5. If the NHS/DVs opinion is in line with what was agreed between landlord and tenant, then no further action is required.
  6. If there is a difference between the two then the landlord or tenant/agents can enter negotiations with the NHS/DV to try and increase their opinion of the reimbursement.

We can act for either the tenant or the landlord during any of these processes.

Please note, the rent review notice from the landlord may include a clause to advise that the rent will not be higher than the DV’s opinion. In which case the landlord’s agent can assist the tenant through the above process. There is however no requirement for the tenant to have representation, of course they may still choose too anyway.

What can BW Healthcare Surveyors do for you?

We can undertake a free initial assessment of surgery leases to determine.

  1. Whether there is any outstanding rent review that could be instigated
  2. What the repair and maintenance obligations are and to ensure any retention of the rent has been actioned
  3. When the lease is up for renewal and when that can be actioned

If instructed to undertake a lease rent review, our service will include the following:

  • Initial discussions with you and analysis of the lease
  • Survey and inspection of the premises
  • Calculate our opinion of rent based upon the facts collected from the survey and the relevant comparable evidence for your area.
  • Issue a rent review notice on the tenant, if acting for the landlord.
  • Negotiate and agree a fair market rent with the other party and their appointed representative, if appropriate.
  • Ensure the relevant notices are signed.
  • Contact the NHS to instigate a challenge for the practice’s rental reimbursement, if appropriate.
  • Negotiate and agree an increase in rent with the NHS and their appointed District Valuer
  • Seek approval from the NHS for the agreed increase and arrange for backdated rent to be paid to the practice.

Why choose BW Healthcare Surveyors?

 

BW Healthcare Surveyors team have considerable experience helping GP Practices with their lease rent reviews. We pride ourselves on our no-nonsense approach and highly competitive fee structures. We will manage the whole process from start to finish and keep you up to date with our progress on a regular basis.

  • We are the Top ranked primary care surveying firm in the UK according to Practice Index.
  • We have 10 specialist primary care surveyors with over 100 years combined experience supporting GP practices with all their premises requirements.
  • Our specialist team have already provided help and support to over 1,000 GP practices.
  • We are SafeContractor accredited, and a Code of Practice approved supplier.
  • We have fantastic working relationships other agents, ICB’s and NHS Premises teams to ensure a speedy and hassle-free rent review process.

Should you have any questions or queries in regards to any of the above or would like to discuss your circumstances with one of our expert advisors please don’t hesitate to get in touch on 0114 4420098 and we would be more than happy to help.

CLIENT TESTIMONIALS

Sue Pyatt

Excellent service throughout, constant updates and feedback from yourselves.

Sue Pyatt, Practice Manager

Francis Mulhern

They were extremely easy to deal with, informative, focussed and efficient.

Francis Mulhern, Bretton Medical Practice Peterborough

Adnan Mohammad

Efficient company that that has a competitive fee and get the job done.

Dr Adnan Mohammad, GP Partner, Newsome Surgery, Yorkshire

Jill Foster

BW Healthcare has that special personal touch.

Jill Foster, Practice Manager, Beacon Primary Care, Lancashire