Ask The Experts - Refusal to Buy In

Published:09/04/2010

Question

We are four GP partners. Three of us own the surgery, but the fourth will not buy a premises share. We intend to charge this partner a rent for using the premises. We receive a notional rent payment of £3,800 per month from the PCT, and we feel that 25% of this is a reasonable rent.

Are we entitled to do this? Would we have to inform the PCT and would we be liable to having this private rental deducted from our notional rent?

Answer

You should look at the situation on a Landlord and Tenant basis (even if you don’t have an actual lease). Indeed it may be an idea for your solicitor to write into your Practice Agreement/Partnership Deed an assumed lease so that the responsibilities are crystal clear.

Within this assumed lease, the three property own Partners are the Landlord and the Tenant is the entire Practice (i.e. all four of you). The Landlord should receive the full Notional Rent and the monies put into a landlord or property account. This money should be used to pay all structural or external repairs, external decoration and the cost of building insurance.

The Notional Rent you get is the District Valuer’s opinion of the rental value of the entire GMS accommodation. If you rent separately any of this to another party, including the non property owning Doctor, you are under an obligation to report this to the PCT and they will deduct it from your Notional Rent. In the eyes of the NHS, the Notional Rent has already paid you in full for the GMS accommodation.

The Tenant (which is of course the full Practice including both property owners and the fourth non property owner) is responsible for all internal repair and internal decoration plus all costs such as carpets, furniture, utilities etc. As a Practice expense, I assume that all four of you will in essence share this expense so, from that point of view, the fourth non property owning Partner is paying their own way.