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Once you’ve decided on a care home, you’ll need to sign a contract to agree terms. Before you sign, it’s essential to read the contract carefully and understand what you’re agreeing to.

In this guide we explain what should be in a good care home contract, things to look out for and what to do if you spot any problems.

On this page you will find information about:

1. Contracts: the basics
2. Unfair terms
3. Checking your contract
4. What to do if there’s a problem before you've signed
5. What to do if there's a problem after you've signed

There is a downloadable checklist as the foot of this page, which includes the questions that are listed on this page. The checklist also features questions to ask about other aspects of the care home from Questions to ask when choosing a care home.

Contracts: the basics

This section explains who is responsible for signing the contract with the care home, and what the contract should cover.

Who will the contract be between?

The contract will be between the care home provider and whoever is paying for the care. There are three likely scenarios for payment:

a) Self-funding: if your relative is paying for their own care, the contract will be between them and the care home.
b) Local-authority payment: if the local authority is funding your relative’s care, the contract will be between the local authority and the care home.
c) Shared payment: if you or someone else is paying a top-up fee to the care home, there will be two contracts. One between whoever is paying the top-up and the local authority, and another between the local authority and the care home. See our information about third-party top-up fees for more information about these contracts.

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The information on these pages applies to contracts between care homes and consumers. If your relative is responsible for signing the contract, it might be helpful to suggest that you go through the paperwork together. If you have a power of attorney, you might need to sign on behalf of your relative. Read our guide on power of attorney to find out about the different types available, how they work and how to set one up.

What should the contract cover?

Care home providers are free to use whatever terms they consider reasonable. The law stipulates that terms should not be unfair.

A care home contract should cover:

  • the cost of care, including the notice period for any increases
  • any deposits or advance payments required
  • details of any trial period offered
  • what is and isn’t covered by the care home insurance
  • the type of accommodation provided
  • the level of care to be provided
  • any additional fees and charges that may be incurred
  • the cost and details of any extra services, such as meals, laundry, personal care (eg hairdressing, chiropody), television and phone bills
  • what happens if residents are temporarily absent from the care home (eg in hospital)
  • the terms of cancellation of the contract, both on your part and on that of the care home, including the required notice period
  • the complaints procedure.

Unfair terms

If a term in a contract is unfair, it won’t be valid. A term may be deemed unfair if it gives the retailer (or service provider) more rights than whoever is paying for the care (the consumer). The law says terms must be designed, negotiated and entered into with the consumer in a fair and open way.

Terms that may be unfair include those that impose excessive cancellation fees or hidden charges, or attempt to limit your legal rights.

To find out more about unfair terms in contracts, and your legal rights, check out our consumer rights pages.

Checking your contract

When choosing a care home, the terms of the contract are of paramount importance. Our advice below tells you what to look for, and how to spot any potentially unfair terms.

Before making a final decision about a care home, ask to see a copy of the contract. If your relative is funding their own care, offer to go through the contract with them - two pairs of eyes are better than one. Read the contract very carefully, and ask the care provider to explain any clauses that you don’t understand. If you are still confused, or unsure about what an element of the contract means, you should consider consulting a solicitor.

A contract should be written in clear, simple language so that it’s easy to understand. It should avoid the use of complicated legal jargon or confusing, ambiguous terms. Important information should be explained in full up front, and not hidden in the small print.

Deposit/advance payments

Many care homes ask for an advance payment, or deposit, to secure a place. However, if your relative’s health or financial circumstances suddenly change, they may need to alter their plans and decide not to take up their place in the care home.

A good contract should clearly spell out how much deposit is due, when it must be paid and what happens if you change your mind before moving in.

Questions to ask

  • Is it necessary to pay an advance payment or deposit?
  • What happens if I change my mind before moving in? Can I get my deposit back?
  • If I do move in, will I get the deposit back or is this deducted from the care home fees?

Terms that may be unfair

  • Not allowing residents to cancel the contract within a specified period of time, eg 24 months.
  • Allowing the care home to keep all the deposit, regardless of the reason for cancellation.

Care home fees and additional charges

A good contract should clearly list all fees, as well as who is responsible for paying them, and when. This should include information about ongoing care home fees, plus a clear breakdown of charges for any additional services, such as meals, laundry, personal care, television and telephone.

It’s important that residents are given sufficient notice of any increases in fees. This gives them and their families the chance to evaluate whether they’re able to meet the extra costs, and choose to put alternative plans in place if not.

Questions to ask

  • Does the care home collect fees weekly, monthly or annually?
  • How much will I have to pay, and what date are the fees due?
  • How are fees calculated?
  • What do the fees include and exclude?
  • Are fees paid in advance or arrears?
  • How do I pay?
  • If relevant, how are NHS-funded nursing care payments accounted for in the fee structure?
  • How frequently are fees reviewed?
  • How much notice will I get for fee increases?
  • What are the charges for any additional services, and are residents allowed to ‘shop around’ for these services or are they tied to using those provided by the care home?

Terms that may be unfair

  • Giving the care home the right to increase fees without notice or explanation.
  • Additional charges hidden in the small print, or making charges for extras appear optional when they are not.
  • Requiring residents to use expensive in-house services - such as laundry, chiropody, hairdressing and phone services – and taking away their right to choose.

Non-occupancy

If a resident is away from the home for an extended period (eg in hospital), the contract should make it clear what fees are payable during that time. Some care homes might pass on savings - eg if they’re not having to provide meals or care during that time – whereas others may not.

Questions to ask

  • What is the care home’s policy on periods of non-occupancy?
  • How long does a resident have to be absent before any reduced fees apply?
  • What are the reduced fees, and how are they calculated?
  • How long can these reduced rates last? Is there a limit to how long a resident can be absent from the care home before their contract is affected?

Terms that may be unfair

  • Demanding payment for additional services when residents are not using them (eg because they are in hospital).
  • Automatically terminating the contract if the resident does not occupy their room for a certain amount of time.

Changing terms of service provision

Care homes may need to change the terms of service provision at times, for legitimate reasons. For example, this could be as a result of increasing fees, altering the level of care provided, or availability of additional services. However, they should give residents a reasonable amount of notice for any changes, and levels of care should not fall below minimum standards set by regulators of care homes in the UK.

Questions to ask

  • How much notice will residents get if fees are to increase?
  • How much notice will residents get if provision of service or levels of care are going to change?

Terms that may be unfair

  • Allowing the provider to increase fees and additional charges without reasonable notice.
  • Allowing the provider to change the level of care provided without notice, or in a manner that falls below that which is defined in the contract.
  • Imposing an excessive financial penalty if, following a change to fees or service provision, a resident decides to cancel their contract.

Need a helping hand?

Which? Legal's lawyers and specialist advisers can answer your questions about care home contracts.

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Responsibility if things go wrong

Care home providers have certain obligations that they must fulfil. These are spelt out in the Consumer Rights Act and the minimum standards set by regulators.

Residents have a right to expect that they, and their possessions, will be looked after with reasonable care and skill. A good contract should not try to limit or take away the care home provider’s liability if it is at fault when things go wrong - for example, if unsatisfactory care leads to injury, or if a staff member loses or damages a resident’s possessions.

Terms that may be unfair

Any terms that try to limit the care home’s responsibility if it is at fault when things go wrong, may be considered unfair. Pay particular attention to any clauses that contain the words ‘disclaimer’, ‘exclusions’ or ‘liability’.

Look out for the following types of terms which may be unfair:

  • The care home is not responsible if it loses or damages a resident’s personal possessions.
  • The care home is not responsible if a failure in its care leads to a resident’s injury (or death).
  • The care home is not responsible if incorrect administration of medicines leads to a resident’s injury (or death).

Leaving the care home

There are several reasons why you or your relative might want to cancel the contract and leave the care home. It might be that the resident is taken ill, and their care needs change. Or that their financial circumstances change, and they can no longer afford the fees. This change in circumstances might happen suddenly.

A good contract should clearly explain a resident’s rights to cancel, and what procedure to follow if they want to leave the care home. Both parties should be able to cancel with a reasonable amount of notice.

Questions to ask

  • Are residents tied in to the contract for a minimum period?
  • How much notice must they give if they want to leave?
  • If residents have to leave the care home, would they be entitled to a pro-rata refund of any fees already paid?
  • What happens to any deposit paid if the contract is cancelled by either party?
  • Under what circumstances might the deposit not be returned in full?
  • How much notice must the care home provider give if they want residents to leave?
  • What happens if a resident dies while living in the care home or staying in hospital?
  • After a resident’s death, how much time does their next of kin have to clear the room of personal possessions?

Terms that may be unfair

  • Unequal cancellation rights (eg the care home can cancel whenever it wants, but residents are tied in for a set period of time).
  • Making a resident pay fees in full if they cancel a contract, not taking actual costs into account.
  • Allowing care homes to cancel without giving notice.
  • Allowing care homes to cancel without giving refunds.
  • Prohibiting residents from cancelling.
  • Not allowing residents, or their families, sufficient time to clear the room of personal possessions.

What to do if there’s a problem before you've signed

If you have any doubts about a contract, do not sign. If you have a simple query about the terms of the contract, ask the care home provider to explain. They might be willing to amend a term if you’re not happy with it.

If you need help understanding the terms, or think something might be unfair, it’s best to get advice from a solicitor.

What to do if there's a problem after you've signed

If a problem comes to light after you’ve signed the contract, and you think a term of the contract is unfair, you can challenge it. Remember that unfair terms are not legally binding so, whatever happens, don’t feel pressured into taking any action – such as paying any fees that you think are unreasonable, or moving out of the care home - until you have sought expert advice.

1. Get advice about your case

Consult a legal expert, who can take a closer look at your contract and advise on whether a term is unfair or not. They can recommend whether you should challenge the care provider by pursuing a complaint, or by taking legal action. You can search for a solicitor on the Law Society website (England and Wales) or the Law Society in Scotland website (in Scotland).

For more general information and advice about challenging an unfair term, see our consumer rights pages.

2. Report it

You can report unfair terms to:

Both organisations have the power to enforce consumer-protection laws and prevent businesses from acting unfairly.

It’s also worth noting that in December 2016, the Competition and Markets Authority (CMA) launched a review into care home practice, to review how well the market works and whether people are being treated fairly.

The CMA would like to hear from anyone who feels that they have been treated unfairly by a care home. Contact the CMA and get more details.

3. Make a complaint

If it turns out that the term is not unfair, but you’re still unhappy with the level of service provided, you can make an official complaint to your care home provider. If you’re not satisfied with their response, you can take your case to the relevant ombudsman. For more information about ombudsmen that cover care homes, including contact details, visit our guide to making a complaint about your care provider.

Downloadable checklist

Use the link below to download our checklist to take with you when visiting a care home.

More information

Page last reviewed: January 2017
Next review due: June 2018