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When a loved one moves into a care home, the contract they sign is the legal foundation of everything that follows: what is included in their care, what they will be charged, how fees can change, and what rights they have if something goes wrong. Most families sign it under enormous emotional pressure, often on the day of or just before a move, without reading it carefully or knowing what to look for.
This guide explains what a care home contract must contain, which clauses are commonly unfair, what your legal rights are under the Consumer Rights Act 2015, and where you can push back before you sign.
What is a care home contract?
A care home contract is a legally binding agreement between a resident (or their representative) and the care home provider. It sets out the terms of the care to be provided, the fees charged, how those fees may change, and the rights and responsibilities of both parties.
Under guidance from the Competition and Markets Authority (CMA), care homes are required to provide a copy of their standard contract before a care needs assessment takes place. That means before you have committed to anything. If a home only produces the contract on the day of a move, ask for it earlier. You are entitled to time to read and take advice on it.
What should a care home contract include?
A properly written contract should set out clearly:
- The full weekly fee and exactly what it covers
- A written list of any optional extras and their individual costs
- The circumstances in which fees can increase and how much notice will be given
- The notice period required by both sides to end the contract
- What happens to fees after a resident is hospitalised
- What happens to fees and any advance payments after a resident dies
- The complaints procedure
- What happens if the home's registration or ownership changes
Under the Consumer Rights Act 2015, all terms must be written in plain English. Legal jargon, or references to separate documents that are not provided alongside the contract, is not permitted. If a clause refers you to a handbook or a separate notice that you have not been given, that clause is unlikely to be enforceable.
"We encourage every family to take the contract away before they sign it. Read it properly, ask us questions about anything that is not clear, and come back when you are ready. A good home should welcome that."
— Ashberry Care Homes
What the weekly fee does and does not include
The headline weekly fee covers the core cost of accommodation and personal care. It does not automatically cover everything. Items that are commonly charged as extras include:
- Hairdressing and chiropody
- Trips and outings
- Escorts to medical appointments
- Newspapers and magazines
- Some therapy services
- Guest meals
CMA guidance requires homes to provide a written list of all extras and their costs before a contract is signed. You should ask for this if it is not provided. The gap between the headline fee and the total monthly cost can be meaningful, particularly over time.
Our article on understanding care home fees and your finances explains the broader picture of how costs are structured and what to budget for.
Fee increases: what is and is not acceptable
Almost all care home contracts allow for annual fee increases. This is standard practice. What matters is how increases are triggered, how much notice is given, and whether the terms are fair to both sides.
Under the Consumer Rights Act 2015, a term is unfair if it creates a significant imbalance between the parties to the consumer's detriment. A clause that allows the home to increase fees at any time, by any amount, with minimal notice is likely to fall into this category.
Reasonable terms include:
- A minimum of four weeks' notice of any fee increase
- A clear statement of the factors that trigger an increase (such as changes to the National Living Wage, regulatory costs, or inflation)
- A right for the resident or their family to give notice to leave if they do not wish to accept the increase
Ask the home what fee increases have been in each of the last three years before signing. This is information they are required to provide, and it gives you a realistic picture of what to expect over time.
Notice periods: what is fair for both sides
Contracts must give equivalent notice rights to both parties. If the home requires four weeks' notice from the family to end the contract, the family should also be entitled to four weeks' notice before the home can ask a resident to leave.
Notice periods are typically 28 days. Anything significantly longer imposed only on the resident or their family is worth querying. Under the Consumer Rights Act 2015 and CMA guidance, notice terms that are heavily weighted in the home's favour are likely to be unfair and may be unenforceable.
Fees after death: a clause families often miss
Many contracts include a provision that fees continue to be charged for a period after a resident dies, to cover the notice period and the time needed to clear the room. CMA guidance limits this to a few days. A clause requiring payment for several weeks after death is disproportionate and should be challenged.
Ask the home directly: how many days of fees are charged after a resident dies, and when must the room be cleared? The answer should be in the contract. If it is not, ask for it to be added in writing before you sign.
Hospital stays and temporary absences
Most contracts allow the home to continue charging the full fee during a hospital stay, on the basis that they are holding the room. This is generally reasonable for short stays. However, CMA guidance states that where a home's costs are reduced during an absence, those savings should be passed on to the resident. A clause allowing full fees with no adjustment whatsoever is worth querying.
Ask what the policy is on extended hospital stays specifically. Some contracts allow a reduced "room holding" rate after a set number of days. This protects families from being charged full fees indefinitely for care that is not being delivered.
Deposits and advance payments
Some care homes ask for a deposit or an advance payment before a resident moves in. Under CMA guidance, upfront fees linked to the admissions process itself rather than to distinct services provided are considered unfair. A home should be able to explain clearly what any deposit or advance payment covers.
If a deposit is required, the contract should state:
- What it covers
- Whether it is refundable and under what circumstances
- How it will be protected
- When it will be returned
Non-refundable deposits, or deposits that can be retained by the home at its discretion, are generally regarded as unfair under the Consumer Rights Act 2015.
Who signs the contract if the resident lacks mental capacity?
Where a resident lacks the mental capacity to sign a contract themselves, the person holding a registered Lasting Power of Attorney for property and financial affairs can sign on their behalf. This is one of the reasons getting LPA in place promptly after a dementia diagnosis matters so much. Our article on power of attorney and care home fees explains how this works in practice.
Family members who sign a care home contract on behalf of a relative with capacity issues should be careful not to sign as personal guarantors for the fees. A guarantor becomes personally liable for unpaid fees if the resident cannot or does not pay. This is a significant financial commitment and should never be agreed to without taking independent legal advice.
"We always make sure families understand what they are and are not agreeing to before they sign. If something is not clear, we explain it. Signing under pressure, without understanding the terms, is not something we would ever want."
— Ashberry Care Homes
Terms that are commonly unfair and can be challenged
Under the Consumer Rights Act 2015, a term that creates a significant imbalance between the parties to the detriment of the consumer is unenforceable. Common examples of terms that have been found to be unfair in the care home sector include:
- Clauses limiting the home's liability for its own negligence
- Clauses allowing the home to change the terms unilaterally without notice
- Disproportionate charges after death or termination
- Minimum stay periods with no corresponding right for the resident to leave
- Non-refundable deposits charged purely for the admissions process
Most of these clauses are negotiable, particularly when a home has vacancies. A home that refuses to discuss any terms at all is worth approaching with caution.
FAQ
Can I ask for the contract before visiting the care home?
Yes. Under CMA guidance, homes should make their standard terms available on their website or provide them on first contact. You are entitled to read the contract well in advance of signing it.
What if the home says the contract is non-negotiable?
Almost all contracts are negotiable to some degree, particularly around fee increase clauses, notice periods, and post-death charges. If a home refuses to discuss any terms, seek independent advice before signing. Citizens Advice can help, and a solicitor with care sector experience can review the contract for a fixed fee.
Do I need a solicitor to review the contract?
Not necessarily. Many families review contracts themselves using CMA guidance as a reference. However, if the contract is complex, if the fees are substantial, or if a personal guarantee is requested, independent legal advice is strongly recommended.
What happens to the contract if the care home is sold?
In most cases, the contract transfers to the new owner. The home should notify residents and families of any change of ownership. Existing terms should remain in force unless both parties agree to new ones.
Where to find out more
Our full care home funding guide covers costs, financial assessments, and what to expect from the funding process in full. Our article on care home top-up fees explains one of the most commonly misunderstood aspects of care home contracts for families with local authority funding in place.
If you would like to understand more about what life at an Ashberry home involves, and what our contract covers, our teams are always happy to talk it through. Make an enquiry and we will be in touch.
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