Fact sheet 3 - What is a lease?
Updated: Nov 19, 2019
What is a lease?
A Lease regulates an occupational arrangement between Landlord and Tenant. It is designed to clarify the responsibilities and obligations of both parties and affords legal protection to both Landlord and Tenant.
Things to look out for…
Leases on GP Surgeries are specialist documents that accommodate specific circumstances particular to the primary healthcare sector. If you are considering taking a lease on a building from which you plan to run your surgery, or if you are currently leasing your premises, it is important to seek professional advice of a Chartered Surveyor in addition to legal advice. Some of the specific areas to look out for are as follows:
❑ When is a lease required?
A lease is required when there is an uncommon party (such as a GP Partner who retires but wants to retain ownership of the premises).
❑ NHS approvals If you seek Notional Rent reimbursement, then the Lease requires full approval from NHS before being signed by the parties. This is absolutely key.
❑ Rent review process It is very important to seek professional advice when a Landlord is actioning a rent review so that the Practice can be protected from potentially agreeing a rent that may not be reimbursed by NHS.
❑ Repairing obligations It is important to understand the full extent of your repairing obligations under the lease – whether that also includes the external parts of the building and mechanical elements such as boilers and any lifts.
❑ Service charge A lease may impose additional charges on a Tenant for cleaning, decorating, repairing and maintaining ‘common’ areas for example, where the surgery is located in a multi-occupied building. These service charges can be very expensive for a Practice and not a recoverable cost from the NHS. It is vital that a Tenant understands the scope and estimated costs associated with a service charge.
❑ Alterations It is essential that you fully understand what you can and cannot do under the terms of the Lease before undertaking any alterations to the Property, as the Landlord can potentially require you as Tenant to remove such alterations, if not undertaken in accordance with the lease.
❑ Landlord & Tenant Act 1954 The Tenant has the right, unless specifically excluded from the Lease, on expiry of the Lease to automatically renew on materially the same terms as the existing Lease.