Mark Williams, Corporate Finance and Commercial Agreements Partner, writes on the importance of properly drafted and compliant residents’ contracts for care homes.
In addition to routinely acting for care home clients in sales, purchases, refinancing and employment law issues, our specialist Healthcare team has recently acted for a number of homes in preparing or redrafting their residents’ contracts.
Complying with consumer law is an essential part of running a care home and the law gives important protection to care home residents and their representatives, who may include their family or an advocate who is supporting them. Care homes are providing services to people who may be in a very vulnerable position and the law requires that the owner considers the difficult circumstances in which people will be making decisions and the fact that they are unlikely to be familiar with the process of choosing a care home. This will be an important consideration when assessing whether a care home owner is compliant with consumer law which requires owners to:
- Treat residents and their representatives fairly.
- Ensure that contracts with residents are fair.
- Perform services with reasonable care and skill.
- Have an effective procedure for dealing with complaints.
Our Healthcare team are finding many residents’ contracts fall foul of consumer law and contain terms that will be unenforceable. Examples of where very careful drafting will be required to ensure the terms are enforceable include:
- Personal guarantees from next of kin.
- Reassessing care needs and consequential changes to fees.
- Termination provisions, particularly for non-payment of fees.
- Periodic review of fees.
Ensuring your residents’ contracts are properly drafted and contain enforceable provisions will potentially save you from significant fees either in lost revenue or in litigating ambiguous contracts.