Is your residential care home contract fair?

Here we outline the key points to consider before signing a legal contract for a residential care home.

Despite the vast costs associated with residential care, many people do not even see their legally binding contract, and few seek professional advice.

As a result, the signed agreement is not always in the resident’s favour. The imbalance in negotiating power of the individual and the home, means that the care home could contractually exploit the resident by including unfair terms. 

The CMA’s advice

According to a market study conducted by the Competition and Markets Authority (CMA), many residents of UK care homes are not treated fairly.

To comply with consumer law, care homes should provide key information upfront to prospective residents and ensure contract terms, complaints and treatment of residents and their representatives is fair.

What should you look out for?

• Terms that require a substantial security deposit, without clear justification, are likely to be unfair. Deposits may include a financial penalty to end the contract, or even deter residents from challenging invoices where they are dissatisfied with the service for fear of losing their deposit.
• If the care home pressurises someone to act as a guarantor, as a condition of accepting a resident, or where it is only mentioned late in the admissions process (often when the prospective resident has committed to taking a place), this is likely to infringe consumer law.
• If fees can be changed at the care home’s discretion, it’s difficult for the resident at contract signature to offer assurance they will be able to pay an unknown future amount. If fee increases are foreseeable then the term is likely to be fair, however if the change is not anticipated it can be considered unreasonable.
• Terms which oblige the residents to vacate immediately are likely to be unfair. The care home should give permanent residents 28 days’ written notice to leave under the Protection from Eviction Act of 1977. Where the resident is unwilling to leave once the notice has expired, the home must apply to the county court for an order to evict.

Harrison Drury can provide guidance and advice regarding care home contracts and managing legal affairs in later life. For more information, please contact  01772 258321.