• BW Healthcare Surveyors

Fact sheet 6 - What is sale and leaseback?

Updated: Nov 19, 2019


A “Sale and Leaseback” in the context of a GP Surgery is where the GP owners sell the property and simultaneously take a leaseback from the purchasing party.


How does it work?

The process includes the following key stages, each of which involves various important aspects that require detailed work and consideration:


❑ Establish draft Heads of Terms for the leaseback arrangement, duly sanctioned in principle by the NHS

❑ Value the Property, prepare sales particulars and proactively market the investment opportunity

❑ Secure an agreement to purchase & lease

❑ Obtain final NHS approvals and manage the legal drafting process through to completion.


Key Considerations

The Sale & Leaseback mechanism is a legally binding process with significant ongoing responsibilities and does not suit all scenarios and circumstances. It is therefore very important to carefully discuss the following aspects when considering whether or not this is the best option for the GP Practice. At our initial consultation meetings, we highlight and facilitate these for discussion between GP Partners and key stakeholders in the Practice:


❑ Retirement / Succession Planning

❑ Signatories to the Leaseback

❑ Repairing & Maintenance Obligations

❑ Rent Reimbursement and Rent Review Mechanisms

❑ Control & Flexibility


Consensus

As the process itself produces significant benefits to a GP Practice, and conveys ongoing liabilities under the Leaseback arrangement, it is crucial that all key stakeholders within the Practice agree on the Sale & Leaseback mechanism as the way forward, if appropriate.


Professional Representation

Due to the complexity and significance of the transaction, it is essential that the GP Practice adopts professional representation from start to finish, through utilising Professional Members of the Royal Institution of Chartered Surveyors (RICS), and solicitors.






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