Clauses to Watch Out for in Dental Office Leases

Starting a new dental practice, or even just moving to a new building, is an exciting venture. However, you will likely have to sign a lease. While a lease can provide you with significant protection, there are also certain clauses to watch out for, as they may hurt you in the long run. Below, our dental office leasing attorney explains what these are.

Office Build-Out Clause 

An office build-out refers to when tenant improvements must be made. Essentially, they refer to when additional planning and construction is necessary before the space is move-in ready from a tenant’s perspective. A dental office lease should limit the amount of time a landlord has to review plans. It should also include penalties, such as the responsibility of the contractor to pay your rent if construction is delayed.

Assignment Clauses 

It is not uncommon for landlords to include clauses that essentially prevent a dentist from selling their practice. Recapture clauses are clauses that allow landlords to terminate the lease if you ask them to assign it to another dentist buying your practice. To make this situation even worse, once you have asked, you cannot retract the request. This means the landlord then has the authority to demand you pay additional funds to assign the lease to someone else.

In other instances, landlords may include clauses that give them a right to a portion of the profits you earn if you sell your dental practice. This type of assignment clause can decimate the nest egg you built up with your successful practice.

Office Damage 

Disasters such as fires, earthquakes, and floods can cause significant damage to a business. If your office is damaged by any of these catastrophic events, your lease may still remain in effect if your landlord chooses to rebuild. However, the contract may not impose a time limit for when the work should be finished. The lease may also force you, or your insurance company, to continue paying rent even if you are unable to use the space.

It is important to ensure that your lease includes a timeframe for the landlord to start and finish repairs. For example, you may include a provision that work must start within 60 days and be completed within 180 days. If your landlord fails to meet these conditions, the agreement should also allow you to terminate the lease.

Our Dental Office Leasing Attorney Can Help 

If you are starting or moving your practice, it is of critical importance that you have your lease renewed before you sign. While you focus on treating patients, our dental office leasing attorney can negotiate your contract and make sure it protects your best interests now, and in the future. At AGS Law, we can help. We can review your lease and negotiate the important terms to make sure you and your practice flourish in the years to come. Call us now at 801-477-6144 or connect with us online to schedule a consultation and to learn more about how we can help.

Source:

utah.gov/pmn/files/599343.pdf