Tips for managing your lease
For dentists that do not own the building where their practice is located, their dental office lease is one of the most important contracts they will need to negotiate. While hiring an attorney experienced with leasing is highly recommended, you will still responsible for going over the provisions in the lease to confirm that the terms are appropriate. Here are some common issues to consider.
Related expenses
The monthly price of your rent isn’t likely to be the complete picture of how much you’ll pay to use the property. Your lease should identify whether the tenant or landlord is responsible for taxes, exterior and HVAC maintenance, insurance and other related expenses.
Rent increases over time
The typical length of a dental office lease is 10 to 15 years. This means rent increases should be written into the contract and calculated according to a mutually agreed upon formula. Be aware of any clause that allows for rent to be adjusted without a specific definition of how the increase will be determined.
Allowance for improvements
If the build-out of your office involves significant improvements that add value to the owner’s property, you may be able to negotiate an allowance (typically paid in reduced rent) to help pay for the renovations.
Subletting your space
Consider options to allow your practice to grow by clarifying your ability to sublet space within your office to an associate or specialist dentist.
Location exclusivity
This clause is important if you are leasing from an entity that owns multiple commercial properties in the area, or if you are leasing space in a large medical center. A location exclusivity clause prevents the owner from renting to a competing dental practice within an agreed upon radius from your location.
After hours rules and availability
Even if you don’t plan on keeping your practice open for late night and weekend appointments, you may require full access to your office for you and your patients to cover dental emergencies. Try to negotiate 24 hour access and double check that exterior lighting, air conditioning and heating are all available after hours.
Hate to negotiate?
If you don’t feel comfortable with your negotiating skills, hire a lease negotiation specialist to ensure you’re getting the best deal and signing a tenant-friendly contract.
