Some care home owners and buyers will try to save money by involving their advisers later in a sale or purchase transaction, but rather than saving fees, this often results in more costs being incurred, says Tom Lumsden, partner, CooperBurnett LLP
Buying or selling a care home can be a difficult and intense process. Firstly, in the case of a purchase, you will need to decide on the care home that is right for your business model. If you are new to the sector, it would be foolhardy to select a care home without advice from experienced professionals, who should be able to help you source the correct type of home for your requirements. If you are an existing operator, it can be difficult to find the right type of home that will fit into your portfolio.
Secondly, you should consider the price and the heads of terms (a short memorandum that sets out who the parties are and provides contact details for them and their advisors, as well as listing the terms of the deal, such as price, whether it is a share or an asset sale, time frames and so on).
Whether buying or selling, a client should always involve their solicitors and other advisers at the earliest opportunity when trying to agree heads of terms. This is because it may be easy to agree terms with the seller or buyer of a care home over many meetings, only to find that when lawyers are instructed, there are legal or technical reasons why those agreed terms cannot be implemented or you may have prejudiced your legal position. There can then follow frustration and delay while the agreed terms are ‘unpicked’, sometimes with significant additional expense being incurred all round.
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