Simple tips for navigating your lease
If you’ve ever had issues with renewing your lease, it may be time to enhance your negotiation strategies. In this post, we’ll share some ideas to put you in the driver’s seat.
Timing is everything
It’s usually a mistake when renegotiating your lease to wait until the last minute. When fewer than six months remain on your term, you may leave yourself with little choice but to accept your landlord’s terms. With insufficient time to turn to Plan B, there’s less leverage to support a counteroffer.
It’s good practice to avoid putting yourself in a “take it or leave it” scenario, by addressing the lease 12-18 months prior to its end. Negotiating early gives you more leverage. Your landlord is likely aware that relocating a dental practice requires 8-12 months, as you need to explore potential spaces, complete market research, negotiate terms, design the space and complete the build-out. Begin the negotiation while your options are still open.
Crafting a lease that works in your favor is more complex than lowering your monthly payment. You should also consider how the lease could support your long-term business plans. Think about the future of your practice. Whether your goal is to expand or move, make sure the terms of the lease coincide with your vision.
Add clauses if necessary
When possible add tenant-friendly clauses to the lease agreement. Some examples are:
- Right of first refusal on adjacent office space: Be first in line to add to your office should one of your neighbors vacate their lease.
- Exclusivity provisions: Limit competition by barring the landlord from renting space to another dentist within the same building or complex.
- Transition-friendly language: Dentists who are nearing retirement age, or may wish to sell within the time frame of the upcoming lease, should ensure stability for the new owner, which can boost the sale value of the practice.
Don’t skimp on professional guidance
Try to involve both a real estate professional and your attorney in the renegotiation of your lease. A small investment now may protect from entering into a long-term agreement with unfavorable terms.