Notional Rent
o When the GP owns the building.
o The level of reimbursement is based upon the current market rental (CMR) which is calculated depending upon the notional lease terms. This assumes a 15 year lease where the tenant has is obliged to undertake internal repairs and the landlord is obliged to undertake external and structural repairs with associated insurance costs.
o The CMR must be reviewed at least every 3 years.
Borrowing cost reimbursement (previously known as cost rent)
o When the GP is paying off a mortgage on a premises ONLY.
o Changes to the borrowing must be notified to NHS England. Failure to do so, may result in claw back of overpayments.
o When servicing the loan, practices are expected to pay down the capital and interest payments on the loan. Failure to pay down the capital of the loan may result in sanctions by NHS England.
Leasehold cost reimbursement
o When the GP rents a property from a private landlord.
o The level of reimbursement is based upon the current market rental or the actual lease rent (whichever is lower).
o The CMR is assessed by an independent District Valuer.
o The rent reimbursement must be reviewed when the landlord undertakes a rent review, unless the review does not change the level of rent being charged.
Important Links
Landlord and Tenant Act 1985
https://www.legislation.gov.uk/ukpga/1985/70/contents
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