Ask The Experts - Partner Tenants

Answer

You need formally to differentiate between the property owning partners and the practice partners by creating a lease.

Alternatively, attend to the matter in your partnership deed by describing the two entities and treating them like landlord and tenant. Thus, if you and the other partners are the property- owners, all of you with the new non- property owning partner, are the tenants. As the landlords you will be charging yourselves and the non-property owner a rent equal to the borrowing costs that the practice then gets reimbursed.

It would not be correct for the reimbursement to be directly paid to the property- owning GP's and for the non- property owning partner to pay an additional rent that they could not get reimbursed.

I assume that the reimbursement exceeds the premises current market rental value, but one day you will convert from borrowing costs to a current market rental value. This amount will then continue to be paid by the tenants to the other partners who are the landlords.

If you create a tenancy, the tenants would have rights. If all you did was collect the rent, they could argue they have security of tenure, so draw up a properly detailed tenancy agreement.