Care home contracts explained

The importance of a care home contract

Arranging care can often come at a difficult time. You might feel forced into making decisions under pressure.

There should always be a written agreement in place before you move into a care home. This will explain the type of service you can expect to receive, the fees you’ll be charged, and other important terms such as notice periods, cancellation policies and the complaints procedure. Before you sign it, it’s essential to read the contract carefully and understand what you’re agreeing to. 

Who will the contract be between?

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

1. Self-funding: If you’re paying for your own care, the contract will be between you and the care home.
2. Local-authority payment: If the local authority is funding your care, the contract will be between the local authority and the care home. In this situation, you should still ask for a copy of the contract and raise any questions you have about what it covers.
3. Shared payment: If the local authority is part-funding the care but someone else is paying a top-up fee to the care home, there will be two contracts – one between the local authority and the care home, and another between whoever is paying the top-up fee and the local authority. See our information on care home top-ups for more details.

Regardless of who is paying the fees, you have the same rights and protections under consumer law.

What should the contract cover?

Care home providers are free to use whatever terms they consider reasonable, but the law stipulates that the terms must not be unfair.

A good care home contract should cover:

• the type of accommodation you can expect 
• the level of care and support you will receive and what will happen if your care needs change
• full details of fees, including the notice period for any price increases
• any deposits or advance payments required
• any additional charges, for example extra fees for meals, toiletries, laundry, hairdressing or television
• details of any trial period, during which the resident or the home can terminate the contract at short notice
• what happens if a resident is temporarily absent from the care home (for example if they’re in hospital)
• what is and isn’t covered by the care home’s insurance
• the terms of cancellation of the contract, both on your part and the care home’s, including the required notice period
• the complaints procedure.

Checking your contract

Before making a final decision about a care home, ask to see a copy of the contract. Competition and Markets Authority (CMA) guidance states that care homes must ensure self-funding residents have received a copy of their standard contract or terms and conditions, and have time to read and understand them, before they agree to move into the home. 

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

If you have Power of Attorney for a loved one, you might need to sign the contract on their behalf. 

Ask the care provider to explain any clauses you don’t understand. If you’re still confused, or unsure about what an element of the contract means, consider consulting a solicitor.

Unfair terms

Under consumer law, contracts must be written and negotiated in a fair and open way. If a term in a contract is deemed to be unfair, then it won’t be valid. 

Terms that might be unfair include those that: 

• impose excessive cancellation fees or hidden charges 
• are unclear about how fees are calculated or when they may change
• limit or remove the care home’s liability in situations where it might have failed in its duty of care
• give the service provider more rights than the person paying for the care
• attempt to limit your legal rights.

For more general information about your consumer rights and protections, visit Which? Consumer Rights.

Questions to ask about care home contracts

Here are some key questions to ask before signing a care home contract. Use this checklist to spot any potentially unfair terms in the agreement.

1. Advance payments and deposits

Some care homes ask for an advance payment or deposit to secure a place. 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 it deducted from the care home fees?

Terms that might be unfair

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

2. Fees and additional charges

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

It’s important that residents are given adequate notice of any fee increases. 

Questions to ask

• How much will I have to pay and when are the fees due?
• What do the fees include and exclude?
• Are they paid in advance or arrears? 
• Are they collected weekly or monthly?
• How often are fees reviewed, and how much notice will I get for any increases?
• Are there charges for any additional services? Are residents allowed to shop around for these services, or are they tied to using those provided by the care home?
• If relevant, how are NHS-funded Nursing Care payments accounted for in the fee structure?
• How long will fees be charged for following a resident’s death? This should be limited to a short, reasonable period, but it may be subject to the resident’s personal belongings being removed within this period.

Terms that might be unfair

• Giving the care home the right to increase fees without notice or explanation.
• Additional charges hidden in the small print.
• Requiring residents to use expensive in-house services and taking away their right to choose.

3. Non-occupancy

If a resident is away from the home for an extended period (in hospital, for example), the contract should make it clear what fees are payable during that time. Some homes will charge a lower rate if a resident is away; others might 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?
• Is there a limit on how long a resident can be absent from the care home before their contract is affected?

Terms that might be unfair

• Demanding payment for additional services when residents aren’t using them (for example, because they’re in hospital).
• Automatically terminating the contract if the resident doesn’t occupy their room for a certain amount of time.

4. Changing terms of service provision

Sometimes a care home might need to change the terms of its service provision for legitimate reasons. This could include changing the care arrangements or increasing fees if a resident’s care needs change significantly. Or it may be forced to make changes to the range of services it provides. However, residents should get a reasonable amount of notice for any changes, and levels of care should not fall below minimum standards set by the care regulators.

Questions to ask

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

Terms that might be unfair

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

5. Leaving the care home or ending the contract

There are several reasons why you might want to cancel the contract and leave the care home. It might be due to a change in your financial situation, family circumstances or health condition.

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?
• How much notice must the care home provider give if they want residents to leave?
• After a resident’s death, how much time does their next of kin have to clear the room of personal possessions? 

Terms that might be unfair

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

More questions to ask before choosing a care home

We’ve created a downloadable checklist of things to ask when choosing a care home. This covers questions about fees and contracts, staff and training, care and support, day-to-day living and other practical issues.

Download the checklist: questions to ask when choosing a care home

Your consumer rights in a care home

As a care home resident, your rights are protected under UK consumer law.

The rights of care home residents and their families are protected under the Consumer Rights Act 2015. Consumer law states that care providers must treat residents fairly, act with reasonable care and skill when providing their service, and deal with complaints in an open and timely manner. You can find more detailed guidance from the CMA about your consumer rights in a care home.

Care providers must also follow specific regulations relating to safety and standards of care. These standards are monitored by the UK’s four independent care regulators, which also arrange regular inspections of care homes.

How to deal with problems in a care home contract

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 in 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 the 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), the Law Society of Scotland website or The Law Society of Northern Ireland. 

Which? Legal is a paid service from Which? that gives you access to a team of specialist legal advisers who can provide guidance on a range of legal questions, including problems with a care home contract.

You could also contact Solicitors for the elderly, an organisation of lawyers with specialist experience in dealing with legal issues for older and vulnerable people.

2. Report it

You can report unfair terms to:

• your local Trading Standards department, which deals with the day-to-day enforcement of consumer law
• the Competition and Markets Authority (CMA), which deals with systemic market-wide consumer problems. Which? Consumer Rights offers a template letter to report unfair terms in a contract.

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

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 could take the case to the ombudsman.

Our article on making a complaint about a care provider has more information on the steps you need to follow.