Your dental office lease is one of the most critical components of your practice. Unfortunately, many health care professionals are focused only on the rents when negotiating and may overlook other critical issues such as: unnecessary personal guarantees, termination clauses, costly relocation clauses, inability to expand, and the inability to control the dental practice sales process. By not understanding these fundamental components of the lease, you may be putting your practice at significant risk.
In addition to the typical concerns involved in finding dental office space, the practitioner should closely examine the lease terms. Some of those are as follows:
- Assignment Provision – It’s important that you negotiate the right to assign your dental office lease to another practitioner. Most Dentists will eventually either sell their practice or retire and transition it to a younger Dentist. In either case the assignment provision in the lease will dictate how easy or difficult that will be.
- Option to Extend (Renew) – In order to provide for the opportunity to grow and continue the business or sell and/or transition the dental practice, it’s important that you secure the appropriate number of lease renewal options. We recommend structuring the lease with a transition in mind (retirement, transition, or sell the practice). Doing so will give you more control over the lease provisions and peace of mind
- Exclusive Use – While it’s not always an option – especially in larger office buildings – many health-care professionals can and should ask a landlord for exclusivity during negotiations. In turn, a landlord cannot lease nearby space to a rival health-care practice within the same specialty during the lease term.
These are just a few of the concerns that dental practices should consider when leasing office space. For additional information feel free to contact us.
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