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Care home contracts

In this article we explain what should be in a good care home contract, who is involved in the contract and what to do if you spot any problems.
5 min read
In this article
The importance of getting and understanding a contract Who will the contract be between? What should the contract cover?
The Competition and Markets Authority investigation into care home practice Unfair terms Checking your contract

The importance of getting and understanding a contract

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

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.

  • Self-funding: if the person you’re caring for is paying for their own care, the contract will be between them and the care home.
  • Local-authority payment: if the local authority is funding your family member’s care, the contract will be between the local authority and the care home.
  • 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. Our information about third-party top-up fees gives more details about these contracts.

The information on these pages applies to contracts between care homes and consumers. If your loved one is responsible for signing the contract, it’s a good idea to go through the paperwork together. If you have a Power of Attorney, you might need to sign on behalf of your loved one. Our Power of Attorney guide explains the different types available, how they work and how to set one up.

Use our calculator to find out the cost of a care home in your area and what financial support is available.


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:

Checklist (ticks)
  • 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 (such as hairdressing, chiropody), television and phone bills

  • what happens if residents are temporarily absent from the care home (for example, they are 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.

Which? Legal
You can get personal advice on the terms of a care home contract from our specialist legal team.

The Competition and Markets Authority investigation into care home practice

In June 2017, the CMA began an investigation into concerns that a number of care home providers were breaching consumer law in some of their contract terms and/or practices. The focus was on self-funding residents and the issues of large upfront fees and the fees charged after a resident’s death. 

In May 2018, the CMA subsequently opened a consultation on draft consumer law advice for UK care home providers for the elderly. This draft advice covers a range of issues including the provision of upfront information, contract terms and business practices, providing services with reasonable care and skill, and complaints-handling.

As a result, in November 2018, the CMA published their consumer law guidance for care home providers. This advice includes what information a care home must provide to consumers upfront; what they should do to make sure people are treated fairly and that their contract terms are fair, and how to make their complaints procedure fair and easy for people to find and use.

The CMA will be carrying out further investigations later in 2019 to establish how many care homes are meeting their obligations. A short version of the advice is published in a guide to care homes and consumer law.

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. Read our article on dealing with problems in care home contracts if you have any problems before or after you sign.



You can also visit the Which? Consumer Rights website for more information about unfair terms in contracts and your legal rights.

Checking your contract

When choosing a care home, the terms of the contract are of paramount importance. Our questions to ask about care homes contracts gives you a checklist of 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. The CMA guidance described above includes the stipulation that care homes need to make sure that people have been given a copy of their standard contract/terms and conditions for self-funded residents, at the latest, by the time they agree to have a care needs assessment by the care home.


The standard contract/terms and conditions should also be easy for people to find from the start of their research. For example, they should be clearly signposted on the care home's website and included in any information packs that they send to enquirers.


If your loved one 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 together (if they’re able to do so) and ask the care provider to explain any clauses that you don’t understand.


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.


If you’re still confused, or unsure about what an element of the contract means, consider consulting a solicitor.

Further reading

Choosing a care home

How to make a shortlist of suitable care homes, and uncover key information to ensure your loved one’s needs are met.

Last updated: 03 Sep 2019