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Practices not to sign occupancy agreement letters if not satisfied with terms

by Valeria Fiore
5 November 2018

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GP practices have been told not to sign NHS Property Services (NHS PS) occupancy agreement letters (OALs) if they do not agree with their terms, Londonwide LMCs has said.
The LMC body representing practices in London said that the letters have not been agreed with the GPC nor with them and for this reason they are asking practices to seek legal advice before signing the letters.
In its September premises update, Londonwide LMCs said: ‘These documents should be treated with extreme caution, and professional advice should be sought from an appropriately qualified legal adviser with healthcare/general practice knowledge and experience before you sign anything.’
The BMA told Management in Practice that they are also advising practices against signing the letters unless satisfied with the terms.
Both bodies are working with NHS PS to get the issue rectified.
What are OALs?
NHS PS introduced OALs as an interim agreement when a lease between NHS PS and a practice is not in place, or close to being agreed, according to a Londonwide LMCs spokesperson.
An NHS PS spokesperson told Management in Practice that OALs ‘provide NHS occupiers with a more flexible basis for occupying buildings when compared to a formal lease, with clarity concerning space occupied and the relevant rental cost, which may be reimbursed’. 
They added that these letters were introduced because in cases where NHS PS is the landlord, the tenants might prefer a ‘more informal occupancy basis’.
NHS PS spokesperson added: ‘As GPs are independent contractors, their occupation may be more suited to a formal lease, since this provides both parties – landlord and tenant – with long term commitment and certainty concerning all aspects of property occupation, including costs, repairing liabilities, compliance/health and safety, to renewal rights and treatment of building common parts.
‘NHS PS has only recently introduced the concept of an OAL and is in discussions with London LMCs regarding roll-out. We hope this will be seen as a positive step forward to provide options for optimising use of NHS buildings.’
As our sister publication Pulse previously reported, NHS PS and Community Health Partnerships took over the leases for GP practices in rented premises from primary care trusts after they were abolished in 2013.
Since taking the practices over, NHS PS has increased rent in line with the market value of properties, while practices are also paying greater service charges following commissioners’ decision to cut subsidies.
According to NHS PS, service charges have not increased in many cases, but were previously funded by the wider NHS.
Where a new lease has not yet been agreed due to ongoing issues, NHS PS has put forward OALs as an interim measure, according to Londonwide LMCs.