The “last man standing” problem is the risk that one or more GP partners cannot retire when they want to because they cannot release themselves from the practice’s lease, mortgage or other long-term liabilities. It is a partnership law and property law problem, not a clinical one, and it tends to surface fastest in exactly the practices least able to absorb it: smaller partnerships with an ageing partner group and no obvious successors.
We see this most often triggered by surgery leases and mortgage redemption penalties, though any onerous, long-dated obligation can cause it, including equipment finance, service charge liabilities, or a personal guarantee given years earlier and never released. Understanding why it happens, and what actually reduces the risk, matters more than most partnership agreements currently reflect.
Why the Risk Builds Slowly, Then Suddenly
The mechanics are similar to a run on a bank. A partnership works on the assumption that each partner can leave in an orderly way, with a successor stepping into their place on the lease, the mortgage and the GMS contract. If recruitment becomes difficult, and one or two partners start to worry that a colleague may leave without an obvious replacement, they start privately weighing up the cost of being the one left holding the liabilities. Once that thinking spreads among the partner group, everyone has an incentive to be next to leave rather than last, which is precisely the dynamic that produces a last-man-standing outcome. A well-drafted partnership deed limits this by requiring a minimum gap, often six months, between permitted retirements, but a gap requirement only works if it is actually followed and enforced.
Where the Legal Exposure Actually Comes From
Joint and several liability under the lease
This is the point where property law and partnership law collide, and it is where our commercial property team spends most of its time on GP instructions. Because most surgery leases are granted to a partnership, every partner named as tenant is jointly and severally liable for the whole of the rent, service charge and repairing obligations, not just their proportionate partnership share. A retired partner who was never formally released from the lease remains exposed to the landlord for arrears or dilapidations claims run up years after they stopped working at the practice.
The 1995 Act only helps if the lease is newer, and the release actually happens
The Landlord and Tenant (Covenants) Act 1995, which came fully into force on 1 January 1996, changed the position for leases granted from that date onward: a tenant is automatically released from the lease covenants on a lawful assignment, unless they have agreed to enter into an Authorised Guarantee Agreement (AGA) guaranteeing their immediate successor’s performance. Many landlords now require an AGA as a condition of consenting to assignment, which means an outgoing partner can still carry liability for their immediate successor even after leaving.
For leases granted before 1 January 1996, and some GP surgery leases run to considerably longer terms than that, the older “privity of contract” position can still apply, meaning an original tenant can remain liable for the whole of the remaining term regardless of how many times the lease has since been assigned. If your practice occupies premises under a long-standing lease, checking its date and structure is not a formality, it directly determines your exposure.
Mortgage redemption penalties
Where the premises were bought with a loan, redeeming that loan early to allow a sale or restructuring can trigger early repayment charges that fall on the departing partner or on the partnership as a whole, depending on how the borrowing was structured and guaranteed. This is a second, independent source of last-man-standing exposure that sits alongside, and is sometimes worse than, the lease itself.
What Actually Reduces the Risk
| Mitigation | Why it helps |
|---|---|
| Keep the lease tenant list current | Add new partners as tenants and formally release retiring partners at the same time, rather than letting the named tenants drift out of date. Waiting means tracking down long-retired partners later, which is far harder. |
| Minimum gap between retirements | A partnership deed clause requiring, for example, a six-month gap between permitted retirements gives the practice time to recruit rather than facing simultaneous departures. |
| Sinking fund for repairing obligations | Keeps cash available for dilapidations and other lease-related costs rather than leaving them as a surprise liability for whoever remains. |
| Break clauses tied to GMS/PMS termination | Can provide an exit route if the contract ends, though enforceability depends heavily on drafting and should not be assumed to work without legal review. |
| Early engagement with the ICB | Under Direction 54 of the Premises Costs Directions 2024, NHS England must operate a protocol for assigning the lease to a nominee where no successor can be found, but this depends on early, honest engagement, not a late-stage rescue request. |
| Consider practice scale and merger | Smaller practices are more exposed because losing one or two partners removes a larger proportion of the covenant strength behind the lease. A merger or joining a larger group can reduce this concentration risk. |
Some GP partners ask about incorporating as a limited company or moving to a limited liability structure specifically to ring-fence this risk. That can help with future liabilities, but it does not retrospectively remove existing personal exposure under a lease or guarantee already in place, and any restructuring of this kind needs to be considered alongside the GMS contract terms and NHS England’s approach to contractor changes, not treated as a straightforward fix.
How This Connects to Property Ownership Decisions
Last-man-standing risk is rarely just about the lease in isolation. It is closely tied to how the surgery building is owned and how retiring partners’ property interests are dealt with. If you are weighing up whether the building should sit inside the partnership at all, see Should Your Surgery Building Be Held as a Partnership Asset?. If a partner is approaching retirement and wants to keep their share in the premises rather than sell it, that decision interacts directly with who remains exposed on the lease, covered in Retaining Your Property Share After GP Retirement. For the underlying lease mechanics referenced throughout this post, see GP Surgery Leases: Why They’re Different from Ordinary Commercial Leases.
What This Means for Your Practice
The single most useful thing a partnership can do is treat this as a standing item, not a crisis response. Review the lease tenant list annually, keep the partnership deed’s retirement provisions current, and raise concerns with your ICB and your solicitor as soon as recruitment starts to look difficult, not once a partner has already handed in notice.
If your practice is worried about last-man-standing exposure on a surgery lease or mortgage, get in touch with our healthcare team or call us on +44 207 566 1188. You can also email us at info@gurvelegal.com.
