GP Premises - a battleground for disputes

Not only are GP practices involved in an increased number of disputes with their PCTs regarding practice premises, relating to the current market rent for the premises, the practice premises are also the reason for internal disputes between GPs. The difference with the internal disputes is that they would be avoidable if GPs put in place written agreements setting out the arrangements to apply the premises.

GP premises - why do GPs need written agreements?

Maintaining practice premises can be expensive and responsibility for such expense is not always clear. When GPs used to occupy premises with all partners having the same ownership interest in the property this was not an issue, since everyone understood who paid for the repairs and maintenance.

Today, it is quite usual for practice premises to be owned by only some of the partners, with those partners sharing the cost or notional rent received. That is usually fine but problems can arise when property maintenance issues arise. Smaller sums will not generally be a problem but large costs, such a roof repairs or plumbing upgrades, that turn up just before a partner is about to retire often give rise to dispute.

To avoid such unnecessary disputes the partners should identify and record, either in their partnership agreement or a separate property agreement, the arrangements for dealing with the property. Such an agreement will identify which costs should be shared by all the partners and which should be borne by the property owning partners. The practice might consider creating a sinking fund or requiring any excess cost or notional rent over the sum paid for occupation (since cost and notional rent include an element to cover maintenance) to be retained by the partnership to cover future property costs.