Last man standing: what GP partners need to know about managing your lease
There is some comfort on this issue from the new Premises Cost Directions which came into force on 10 May 2024. The new directions envisage a protocol under which NHS England ‘may’ recommend an assignment of your lease to a nominee body. We will have to wait and see how this will play out in practice.
However, there are already plenty of options for the partner in this position.
Firstly, partners should ensure that new partners are joined as a tenant to the lease. This is straightforward and you can remove retiring partners at the same time. Doing this regularly means you avoid the situation where you need to track down long retired partners as they are still named on the lease.
New partners should take advice at this time to ensure they are not taking on liabilities that should have sat with prior partners, for example, whether the property has been kept in repair. Getting new partners "on the hook" reduces the liability of there being a last partner standing event.
While taking on new partners is not always easy, any partner that does find themselves as the last partner standing and wishes to retire should first speak with the Integrated Care Board (ICB) about possible options. They may know other practices looking to expand or take over your practice and be able to help facilitate this. The lease would be assigned to the new practice, and you would have no further liability.
If there are no practices willing or able to take yours on and the ICB wants to continue to commission services from your premises, it is likely they will facilitate an interim provider who will take the lease from you.
If the premises are no longer required for provision of services, this is where alternative options need to be considered.
Many practices will avoid being open with their landlord at this point, but it is worth considering having the discussion with them. It may throw open options that you had not otherwise considered.
Whilst your lease (with no break clause) cannot be terminated early without landlord agreement, it may be worth looking at the alternative use provisions in the lease. You may be able to assign or sublet the lease if not to another NHS practice, then to a private health provider or alternative use. This will depend on the restrictions in the lease.
You may have a break right in your lease and/or what is known as an Armageddon clause. In either case, you should take advice with plenty of time before any break date and be aware that the Armageddon clauses in particular can only be operated in very limited circumstances.
Last word
It is worth noting that whilst we often advise GP partners who are worried about becoming a last partner standing at some point in the future, it has rarely been the case that their fears have come to pass. It is much more usual for another practice or another provider to be found to enable last standing partners to walk away. Where difficulties arise is when the practice has not given enough notice of this to an ICB or has terminated their contract without considering the impact on premises. So, the simple advice is to prepare early and keep the other parties involved informed as to your plans.
Get in touch if you’d like to discuss any of the issues raised here.