care & residential homes

Why you need a specialist lawyer in care and residential home transactions.

The care, nursing and residential home sector has been subject to increased Government intervention over the years. Consequently care home owners face new economic, employment and regulatory issues. Failure to address these correctly can damage the reputation of a care home and exposes owners and operators to civil, even criminal, sanctions. Slee Blackwell has considerable experience in care and residential home transactions and that experience tells us the major cause of problems is a failure to keep on top of these legal issues from the start.

Sales and purchases of care and residential homes

The sale and purchase of care homes can involve the care home itself, together with the goodwill of the business and the equipment being sold to a Buyer. Often a care home will be run by a limited company and the buyer will purchase the company and all its assets, including, the care home business. Both types of transaction require expert legal advice on some or all of the following issues. :-

Property

With care homes the property is often the main asset and the foundation of the care homes’ goodwill. Buyers need to know everything about the property and any matters which may affect it, such as restrictive covenants, planning permissions and environmental issues. It is crucial that purchasers are fully aware of all these issues before completing to ensure they can run the care home in accordance with their business plan. Drawing on our vast commercial property law experience we can advise you on all aspects of care home property sales and purchases.

Employees

Whether you are purchasing a limited company or a care home business the Transfer of Undertakings (Protection of Employment) Regulations 2006 (known as TUPE for short) will nearly always apply. It is important that all purchasers receive specialist legal advice on this complex area to ensure they comply with employment law legislation as failure to do so can leave a buyer exposed to costly employment tribunal claims. Our team of business lawyers include experienced employment law specialist so you can be confident you will receive the right advice.

Business Assets

In addition to the property itself a typical care home business will consist of a number of different assets. The most important of these is likely to be the goodwill of the business, which includes the business name, business websites and any other intellectual property associated with the business. It is vital purchasers are able to use these rights freely for trading purposes and in order to promote the business. Other assets to consider include equipment, fixtures and fittings, debtors and creditors and stock.

Commercial Contracts

Commercial contracts include resident contracts, supplier contracts, hire purchase and leasing agreements. It is important to know which contracts will transfer to a purchaser and the affect they will have on the new owner. Some contracts will be critical to the effective running of the business so great care must be taken to ensure that the legal benefit of the contract is passed to the buyer. This can sometimes require consent from a third party. Other contracts may be extremely onerous and a new buyer will want to source his own suppliers. We provide clear, straight forward legal advice on the terms of any commercial contracts and explain the implications for care home buyers and operators alike.

Company Law and Corporate Issues

Company acquisitions are extremely complex and involve lots of paperwork. In addition there are cumbersome statutory requirements which must be met to avoid companies’ house fines, civil claims or criminal prosecutions. A sale and purchase of a care, residential or nursing home company cannot be completed without the assistance of specialist lawyers who have broad experience in corporate transactions. Not only do our business lawyers have years of experience in corporate transactions but we have niche legal expertise in the transfer of care, residential and nursing home companies.

Sale and Purchase Contracts

A contract is a legally binding document so great care needs to be taken with the terms. The general rule is ‘buyer beware’ so a purchasers need to obtain as much information about the business as possible before committing themselves. Our specialist solicitors make all the necessary enquiries of the seller and provide appropriate advice and guidance on the replies. A buyer will generally want a seller to guarantee there are no issues which could lead to costs liability in the future such as, for example, a potential legal claim against the business. A buyer will want these guarantees, or warranties, to be as wide as possible while a seller will want to narrow their scope to reduce any potential future liability. This is a careful balancing act and gives rise to a great deal of negotiation. It is crucial to have a skilled business lawyer conduct these negotiations to avoid any costly mistakes. Our specialist solicitors are experienced in negotiating on behalf of buyers and sellers . They are therefore well placed to ensure your best interests are protected.

Care and Nursing Home Legislation

The care, residential and nursing home sector is subject to much legislation and regulation. The Care Standards Act 2000 and The Safeguarding Vulnerable Groups Act 2006 are the two principal pieces of care home legislation. However it is the Commission for Social Care Inspection (CSCI) requirements and conditions that will be most familiar to the owners and operators of care, residential and nursing homes. In addition resident contracts with individual local authorities impose service level requirements upon operators. It is therefore essential that care home operators receive expert advice on all these requirements. Our team of business solicitors can offer expert guidance to operators on all these issues. Our solicitors have acted on the sale, lease and purchase of private and public care, nursing and residential homes all over the country for sums ranging from hundreds of thousands to millions of pounds. We understand how care homes operate on a day to day basis and the legal requirements they have to meet.

Our approach

Confidentiality is crucial to care home transactions in order to maintain harmony within the business. We are experienced in liaising with key personnel to obtain the information required for legal disclosure without alerting the staff or residents. We can advise and draw up documents to ensure all negotiations are kept confidential to protect your business interests.

We will provide a clear timetable for any deal and an accurate, competitive estimate of the likely associated legal costs. We can do this because of our years of experience in the care, residential and nursing home sectors. This experience means we work with other professional, such as accountants, to provide the required information to the buyer in order to create a deal that is most tax efficient to our client. We regularly act for large commercial lenders and banks. Therefore, we are experienced in dealing with the complex security documentation and lending requirements of banks associated with these transactions. We understand clients may need matters to be completed within tight deadlines which our experience allows us to do.

For these reasons we have many owners of care, nursing and residential homes who instruct us time and time again.