West Lodge, Laylands Farm, Colden Common

Winchester

SO21 1TH

Tel : 02380 603720
Fax : 02380 603727

 

FIRST TIME/EXPERIENCED BUYER'S GUIDELINES


For the purchase of a Residential Care Home

Bed Ratios

Your investment would be stronger if all the bedrooms are singles. If 80% of the rooms are singles, this should be acceptable for banking purposes. If the ratio is poorer than 80% we should discuss this further due to the potential ramifications by 2007 of New National Standards. (The Government in England have relaxed the current Care Standards requirements for pre-existing accommodation in homes as at April 2002).

  


Registration

Ideally, this should be for 20 or more as the greater the number, the better the “staff to income” ratio becomes. Also there is a lessened effect on serviceability if there are a number of deaths/discharges (break-even levels). Exception to this maybe where you are sufficiently experienced to operate very much “hands on” or for specialist sectors i.e. learning disabilities.

Passenger Lift

Whilst a lift is not always a requirement of the Registration Unit, there is a positive benefit to having one for the following reasons:

i) Although the home is a Residential Care Home, there will be an ongoing deterioration of the ambulant residents, which could result in the premature discharge of a resident because of the inaccessibility of their bedroom.
ii) A chair lift is frightening to some residents.
iii) There is an ongoing pressure for improvement in the standard of amenity, which might mean that a home with a lift will receive more referrals.
iv) If there is not a lift at present it might be useful to look at the potential that the site offers for one to be installed at a later date.
 

Inspection Reports

Every home should have twice-yearly visits from the Registration Officer. One will be announced and one unannounced. This report is most informative in that it details all the identified shortcomings in both the administrative procedures as well as the standard of amenity. Bear in mind that the Fire Officer and the Environmental Health Officer will report to the Registration Officer and therefore the Registration Certificate covers all three Authorities. It is quite common for these Authorities to tighten the standards upon change of ownership, so it is important that there

is a dialogue with the Registration Officer as soon as possible. It is not uncommon for the Vendor to prevent contact with the Registration Officer until an acceptable offer for the business has been made. In practice this might prove detrimental to the purchaser. An example of this can be discussed in greater detail later.

Wages

These would normally represent in the region of 35% of the fee income of a Residential Care Home and 40% to 50% if fully managed. This can vary depending on average fees, which are generally higher for private residents and the size of Registration. Staff costs have risen compared to fees and some Inspectors require high provision of staff cover where dependency of the residents is greater.

Provisions

Food provisions usually amount to less than 7% of the fee income, although this can vary depending upon average fees and size of registration. A general guide is approx £1000 per annum per resident

Registered Manager

Should your application to CSCI be successful, you will become registered owners. A registered manager will be responsible for the day-to-day care of the residents. If a Home is currently managed by the owner, it will be necessary for you to recruit a manager. This is less than ideal because of the disruption caused to the residents and relatives. It is very often the case that an existing member of staff might be registerable. After an appropriate period of ownership(normally two years) and obtaining your NVQ 4, you could become the registered manager.

Room Sizes

There is no guarantee that registration would be transferred at the existing level. If a room is slightly undersized, the Officer might take the opportunity to de-register it at the change of ownership. If a number of rooms are of the minimum size, your investment might be devalued in future years when tighter industry standards are sought. The Government has issued a press release on 21st July 2000 regarding New National Standards on room sizes and other facilities in respect of Care Homes. Generally those care homes with pre-existing registration as at April 2002, will be re-registered for the current configuration of bedrooms.

En-suite facilities

The greater the number of rooms with en-suite facilities the better. As with single occupancy rooms, if you are able to offer a high standard of amenity, your rooms should be in greater demand. It should be noted that some banks will not support applications where there is poor en-suite ratio.

These are a few of the main considerations I will be pleased to advise you on whilst providing a comprehensive financial analysis. A book of guidelines is normally available from the CSCI. The guidelines previously varied from area to area in the past, so it is necessary to contact the local Inspector.

Please note that the above statements have been prepared as a general guide, therefore any potential purchasers should make their own investigations. Whilst every care has been taken in compiling the guide Brent King do not warrant their accuracy and cannot hold themselves liable for any error, omission or misstatement therein.

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