In our previous blog on the GP Sustainability Fund, Michael Royden explained that in order for a GP contractor to receive a GP Sustainability Loan, a standard security must be registered against the GP Premises.
Before a standard security can be granted and loan funds released, the GP contractor must demonstrate to the Health Board that they hold a valid title to the premises. This could be as simple as showing the title deeds of the premises to the Health Board which confirms the ownership of the GP contractor. However, this could become more complex if former partners are still shown on the title deeds. The Health Board might request for the title to be transferred from the former partners to the current partners of the GP premises before progressing any further. Furthermore, whether the title deeds are up to date or not, the Health Board may also require a legal report to be exhibited for the premises which shows the current position regarding ownership and existing securities.
As the Land Register of Scotland is aiming for all property in Scotland to be registered by 2024, the standard security will induce first registration if the premises are not already in the Land Register. A plans report would be required to show that whole or part of the premises are not already registered in the Land Register of Scotland.
If the Health Board is then satisfied that the GP contractor holds a valid title to the premises, the standard security can be executed and loan funds paid out. This requires a form of standard security to be signed by the partners of the GP premises in favour of the Health Board. Usually when a commercial lender is providing a mortgage, they will send out loan papers to the borrower’s solicitor along with their prescribed form of standard security for signing. It is unknown yet if the Health Board will have their own form of standard security or not. If the Health Board does not have their own standard form, this may have to be drafted by the borrower’s solicitor and approved by the Health Board.
Once the standard security has been signed and loan funds sent to the GP contractor, the standard security will be sent to the Land Register of Scotland for registration. Registration dues must be paid by the granter of the standard security. The registration dues with the Land Register of Scotland are currently £60.
Although taking out a GP Sustainability Loan could be straightforward where the title to the premises is up to date and it is already registered in the Land Register of Scotland, there are definite pitfalls if there are other factors to take into account. This could escalate to significant time delays and increased legal costs especially where first registration of the premises is a potential consequence.
Ewan Miller is a commercial property solicitor specialising in advice to healthcare professionals. We are always delighted to talk without obligation about whether we might meet your needs. Call Ewan on 01382 229111.