Care Home Contracts - An Expert Guide For 2025!

A care home contract is a legal document, not paperwork to skim and sign. It sets out what you'll pay, what care you'll get, and what happens if things change or go wrong. Whether you're arranging care for yourself or a family member, knowing what should be in it — and what shouldn't — protects you later.

Who is the contract actually between?

This depends on how the care is funded.

• Self-funded residents: the contract is directly between you (or the resident) and the care home.
• State-funded residents: if the local authority has assessed and agreed to pay for care, the contract sits between the council and the care home. You can find out how this assessment works via GOV.UK's guidance on applying for a care needs assessment.
• Top-up fees: if a family chooses a home that costs more than the council will pay, a third party (usually a relative) agrees to pay the difference. This creates two contracts: one between the council and the home, and a separate top-up agreement between the home and whoever is paying the extra.

Knowing which arrangement applies matters because it determines who you complain to, who can change the fees, and who is legally responsible if something goes wrong.

What should a care home contract include?

A properly drawn-up contract should be clear and specific, not vague. Look for the following.

• Costs in full: the deposit (if any), the weekly or monthly fee, what it covers, and any extras charged separately (hairdressing, outings, chiropody, and so on).
• Notice of fee increases: how much notice you'll get before fees rise, and how increases are calculated.
• Trial period: many contracts include an initial trial period, often around 30 days, during which either side can end the arrangement without penalty if enough notice is given. Check the exact length and terms — this isn't guaranteed by law, so it should be spelled out.
• Care and services provided: what level of care is included, how the care plan is reviewed, and what happens if needs increase.
• Accommodation details: room type, shared or single occupancy, and what facilities are included.
• Insurance: what's covered for personal belongings, and what isn't.
• Ending the contract: notice periods for both resident and home, and the process for removing belongings.
• Absence policy: how fees are handled during hospital stays or holidays away, and whether the room is held open.
• Complaints procedure: a clear route for raising concerns, without discouraging residents from doing so.

The Care Quality Commission inspects and rates homes on quality and safety, but the contract itself is a separate legal document — CQC ratings don't cover contract fairness. For financial terms, MoneyHelper has independent guidance on care costs and paying for care.

What counts as an unfair contract term?

The CMA published guidance in 2018 requiring care homes to present fees and terms clearly, before a resident moves in, so families can make a genuine comparison between homes. Terms that disadvantage residents unfairly are not enforceable, even if they're written into the contract.

Examples of unfair terms include:

• Making residents responsible for problems caused by the home's own failings.
• Charging fees for a set period after a resident's death, beyond what's needed to cover genuine costs.
• Sudden or unexplained fee increases with no proper notice.
• Withholding key information about costs or terms before you sign.
• Requiring residents to give up statutory rights as a condition of admission.

What if you're unhappy with the care being provided?

Work through this in order:

1. Raise it with staff or management first. Be specific about what's wrong and what you want to happen.
2. Use the formal complaints procedure. This should be in the contract or resident handbook, with expected response times.
3. Write it down. Keep a record of incidents, dates, and any replies you receive — this matters if you need to escalate.
4. Escalate externally if unresolved. For local-authority funded care, contact the council's adult social care team. You can also report serious concerns to CQC, and unresolved complaints about council-arranged care can go to the Local Government and Social Care Ombudsman.
5. Get legal advice if you believe rights are being breached or care is unsafe.
6. Consider moving if concerns are consistent and unresolved after all other steps.

What are a care home's legal obligations to residents?

Care homes in England are regulated by CQC and must meet fundamental standards of care. In broad terms, homes are expected to:

• Provide care that meets each resident's assessed needs, including medical and personal care.
• Respect residents' privacy, dignity and independence.
• Keep the premises safe and hygienic, with proper food hygiene and safeguarding practices.
• Comply with health and safety law, including fire safety and staff training.
• Employ appropriately qualified and trained staff.
• Manage medication safely and accurately.
• Protect personal and medical information in line with data protection law.
• Provide a clear, accessible complaints procedure.
• Deliver everything agreed in the resident's contract, including financial terms.

Failing to meet these standards can lead to CQC enforcement action, up to and including closure. You can check any home's latest inspection report and rating on the CQC website.

What happens if either side breaks the contract?

Consequences depend on the nature and seriousness of the breach.

If a resident breaches terms

• Persistent non-payment of fees, or behaviour that seriously endangers others, can in severe cases lead to eviction — though this must follow the notice and process set out in the contract.
• Early termination or property damage may trigger additional charges or loss of a deposit.

If a care home breaches terms

• Residents or families can pursue a complaint, mediation, or in serious cases legal action for compensation.
• CQC can impose regulatory penalties, including fines or restrictions on the home's registration.
• Where services promised in the contract are withdrawn, the home may be required to reinstate them or offer a suitable alternative.

Most contracts require mediation or a formal dispute process before legal action, so check what your contract specifies before going further.

Checklist: reviewing a contract before you sign

• Read every clause — don't rely on a summary from the home's staff.
• Ask for anything unclear to be explained or amended in writing.
• Check the fee structure against your budget, and ask what triggers a fee increase.
• Confirm what happens during hospital stays, holidays, or a trial period ending early.
• Check the complaints procedure is genuinely accessible, not just a name and address.
• If capacity is a concern, check whether a lasting power of attorney is needed to sign on someone's behalf — see GOV.UK's guidance on lasting power of attorney.
• Get independent advice from a solicitor or Age UK if the contract is complex or you're unsure.