LEGAL MATTERS Generating additional income from your care home estate How can care providers diversify estate usage? Rob Walton, a Partner at RWK Goodman, outlines estate assessments and the legalities surrounding licences and lettings.
Estate Assessment and restrictions So, what should an Estate Review look at and what issues should be identified? 1. Would any alternative rights be needed? Are there existing third-party rights to be taken into account? 2. Are there any restrictions on use? 3. If the site is held under a long lease, are there restrictions in the lease? 4. Are there restrictions due to safeguarding, third-party restrictions or charity/lender consents needed?
Alternative uses
Given the rising costs due to issues over long-term energy security, inflation and the cost of living, care providers have started to be more creative in their methods of generating income. For many years, the education sector with its budget constraints has been diversifying its estate usage; are there lessons that can be learned and opportunities for the social care sector? Just like the education sector, the social care sector must deal with restrictions both externally via the CQC and internally through its own safeguarding procedures, but there are also possible restrictions on the land itself, so the first step when looking to diversify usage is to carry out an Estate Assessment or Review.
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Energy generation If the site is suitably large, it may be attractive to third-party energy providers who would lease the land and then sell back the energy to the grid in exchange for a rent and free energy for the landowner. Typically, this would be solar or wind. Development/sales This is where the landowner is looking to ultimately sell off part of their land for development. Often, developers will seek to secure an option over the land which is dependent on planning permission or obtain a pre-emption agreement on the basis they may wish to acquire the land in the future for an initial payment. Lettings and licences This requires entering into a legal agreement
Care England
for the letting of the whole or, more likely, part of the land, unit or wing. These are used typically for agreements longer than one year and where exclusive possession of an area of land (or building) is given. If it is a business arrangement, then the letting will automatically be protected under the Landlord and Tenant Act 1954, meaning it can only be ended under one of a number of grounds. This can be excluded via notice. Examples include: • Parking spaces. • Office space. • Storage. Licences differ from letting in that it is typically used for an arrangement of less than a year and where exclusive possession of an area isn’t given. It terminates at the end of the period of the licence. Examples include: • Forest schools. • Clubs and associations utilising space. • More general parking usage. Biodiversity Net Gain (BNG)/Nutrient Neutrality (NN) and EV Charging Whilst it is becoming common for employers to offer EV Charging points for their employees, it is possible to enter into a lease arrangement with a third-party provider for EV Charging and receive rent and, possibly, profits from the usage. Whether the site is suitable is dependent on its location and surrounding infrastructure. BNG has now been delayed to January 2024 for most developments and April 2024 for small developments with large scale infrastructure from 2025 and requires any development over a certain size to increase biodiversity by a minimum of 10%. Where this is of interest to landowners is that the gain can be acquired off-site (though typically within the same local authority area). Landowners can either carry out the BNG themselves for a payment or they can lease the land for the work to be carried out and maintained.
Care England
Note this requires at least 30 years of maintenance of the BNG. Nutrient Neutrality is already in place and comes off the back of a European legal case. It has similarities to BNG as it is about changing the nutrient level and
There are myriad opportunities depending on the site, but the first step should be to carry out a full assessment and develop an overall estate strategy based on income generation, site usage and energy needs/efficiency measures. can be utilised via off-site provision. Again, this can be done for a payment. Both BNG and NN are of interest to those with larger estates. There are myriad opportunities depending on the site, but the first step should be to carry out a full assessment and develop an overall estate strategy based on income generation, site usage and energy needs/ efficiency measures. Once this is complete, opportunities can then be explored. It is always recommended that legal advice is sought before not only entering into any agreement but also in the Estate Review stage to identify any potential issues. RWK is offering free estate reviews to up to 250 care providers (Care England members).
Robert Walton is a Partner at RWK Goodman specialising in healthcare, charity and education. He also has expertise in energy matters, particularly renewables and EV Charging. Email: rob.walton@rwkgoodman.com @RWKGoodman
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