Ask The Experts - Repairs Allowance

Published:20/02/2009

Question

My three partners and I lease our large health centre. The PCT pays the rent directly for us but we have never received a repairs allowance. We are responsible for exterior and internal repairs but the landlord insures the building. Are there guidelines stating that we should receive a repairs allowance from the PCT? The building is expensive to maintain and for the past five years we have picked up the costs.

Answer

I understand that you lease your property and bear the responsibility for both internal and external repair and decoration. You note that the landlord insures the building but I am not sure whether or not he has the ability to claim this cost back from you by way of “insurance rent”.

The NHS (GMS-Premises Costs) Directions 2004 require that the PCT instruct the District Valuer to consider the level of rent agreed (either at the onset of the term or at review) and then, provided he agrees that that is a fair sum, to adjust it and add on in respect of any insurance premium paid or reimbursed by the tenants and in respect of any external repair and decoration liability of the tenants (the internal repair liability is not treated in this manner and is a direct responsibility and cost of the Practice). Thus the PCT should be presented with a report from the District Valuer advising of a higher reimbursement sum than the lease rent. However, I should advise that if the District Valuer did not agree with the level of lease rent, the above adjustments may have been consumed within his devaluation (i.e. he could have reduced the lease rent by 5% as he thought it too high and then added 5% for the repair liability, net result lease rent equals rent reimbursement).

Within the Directions, there is also the ability for a PCT to pay rent direct to a landlord but this does not negate their requirement to contribute as allowed by the DV towards the Practice's repair and, if appropriate, insuring liability. In order to fully answer your question, there are a number of potential variables and you really need to get a specialist valuer to consider the details of your lease and the level of rent agreed.