Do your care home’s terms and conditions comply with the law and the Competition and Markets Authority (CMA) views on fairness?
The care home market in the ULK is continuing to grow and in connection with such growth comes an increased level of scrutiny and regulation. Whilst it is taken for granted that care homes will be regulated in terms of their Care Quality Commission (CQC) registration and the all important care services they provide, an increasing level of scrutiny is being placed on the terms and conditions which care homes apply to their residents.
As a care home operator it is important to ensure that the terms and conditions you use are up to date and enforceable. Having terms which are not up to date could mean that they are both worthless in the event of a dispute and could cause reputation risk if they are found to be unfair.
The starting point for a care home’s terms and conditions is the Consumer Rights Act 2015, closely linked to this, the Competition and Markets Authority (CMA) have also provided a great deal of advice and guidance on care home terms and conditions. If you are operating a care home, the following gives an overview of some of the key areas within your terms and conditions that you may need to consider to ensure they comply with the law and advice provided by the CMA.
Transparency and Clarity
First and foremost, as with any consumer contract, there is a requirement for the terms and conditions to be clear and easy to understand.
Using plain English is a good start and ensuring that all documents that form part of the terms and conditions are provided with the contract. Referring to other documents, notices or information, such as a welcome pack or hand book, that can be requested is generally not considered to be transparent and those supplemental documents may not be binding upon a resident.
It is important that any potential resident is able to make an informed decision about the service that is being offered by the care home provider, straight forward easy to read terms and conditions are a good starting point.
Guarantors
Frequently, relatives of a care home resident are required to act as a guarantor to meet the care home's costs in the event that a resident is no longer able to fund their own stay at the care home.
Whilst guarantees are generally acceptable and enforceable it is again important that the guarantee is clear such that any guarantor can easily understand the potential liabilities that they are accepting.
Varying fees and Interest
Whilst it is accepted that there will be a requirement for a care home to increase its fees from time to time, any increase must be proportionate and explained to the resident in a timely fashion.
The CMA suggests that a minimum notice of 28 days prior to any price increase taking effect is reasonable along with an explanation as to the basis upon which such an increase is being applied.
Interest on late payment of fees is also reasonable and accepted. However, such interest that may be charged should be reasonable and proportionate. Terms and conditions should set out the rate of any interest that is to be charged, when it will be applied and any other costs that may be levied against the resident.
After Death fees
This aspect of care home fees has come under significant scrutiny from the CMA and was subject to its own specific market review.
There is clearly a commercial and human aspect to this type of clause within a care home contract. Whilst it is accepted that a care home will wish to maintain the maximum level of occupancy, grieving families also need time to make arrangements to collect personal items from a deceased resident.
This should not be seen as an opportunity for a care home to continue to charge the deceased resident’s estate fees whilst the room is unoccupied. The CMA recommends that fees up to an equivalent of 3 days can be charged following a resident’s death if the room has been cleared or up to 10 days to allow time for the room to be cleared and personal items collected, following which time the care home can make arrangements to store the goods themselves.
Temporary Absences
It is not unusual for a resident of a care home to have a temporary absence from the care home, this may be due to a period of time in hospital or staying with relatives for a short period.
When a resident is absent from a care home it is reasonable to expect that they would receive a reduction in the fee that they are being charged to recognise the saving the care home is making in not having to provide services to the resident during that period.
Funding Shortfalls and ‘top ups’
A resident of a care home may at some point during their stay at the care home become dependent upon a form of local authority funding. The problem that then arises for care homes is that there may be a shortfall between the level of local authority funding available and the charges levied by the care home for a resident to continue to reside there.
To overcome this issue a care home may wish to make a provision in its contracts to provide that a resident will meet any funding shortfall if local authority funding becomes available. These arrangements are not allowed if local authority funding becomes available a new contract must be entered into.
Trial Periods
Many care homes provide residents with an opportunity to have a trial period to ensure that both parties are happy that the new arrangements will be suitable. During these trial periods some care homes may attempt to provide an unduly short cancellation period to enable them to remove the resident from their care or attempt to withhold any fees that have been paid in advance, in respect of the trial period.
Neither of these are considered to be acceptable practices, any termination rights to the benefit of the care home should be a minimum of 7 days, to allow a resident a suitable amount of time to fund new arrangements and is there is a termination of the contract any pre-paid fees should be returned with a pro rata deduction for the duration of the resident’s stay.
Termination
Whilst the CMA recommends that a 7 day notice period may be reasonable during a trial period for any permanent resident the notice period must be at least 28 days, although care homes should also be aware that any permanent resident may well have accrued other statutory rights which prevents them from being forcibly removed or evicted from the care home.
The above provides an overview of some of those matters which care homes must give particular consideration to when drafting their terms and conditions.
At Birkett Long we are able to assist care homes in drafting terms and conditions to ensure that they are fair and enforceable. Please contact Tim Field on 01206 217366 or [email protected] if you would like to have your care home’s terms and conditions reviewed or amended.
