Your dental office lease can have a profound impact on your practice as well as your practice’s value. Among other important terms, your lease will establish the rent you will pay, your responsibility regarding upkeep and upgrades made to the property, and your ability to renew your lease. Do not miss out on the opportunity to negotiate the terms of your lease so that they are most beneficial to you and protect your business. As a dental practice looking to lease property, you do not want to underestimate the bargaining power you bring to the table when you are looking to establish a new or renewed lease relationship with a landlord. Missing out on negotiating the terms of your dental office lease can mean significant money left on the table and potential problems down the road. Here are some tips to successfully negotiate your dental office lease.
Successfully Negotiating Your Dental Office Lease
To succeed in negotiating your dental office lease, you need to be aware of some of the key lease issues that are worth negotiating. The term of the lease, for instance, is often vital to a practice. To establish your dental practice in the community and ensure a consistent location for the foreseeable future, it is likely that you will want a minimum lease term of 5 years, but will likely want it to be longer and with the option to renew. Starting with a solid base term and allowing an option for renew can be a great way to ensure you have time to establish your practice as well as some flexibility to renew (or not) in coming years.
There are also terms that will have direct and profound financial impacts on your dental practice and you should, of course, be sure to negotiate these terms as well. The amount of rent you will pay, for instance, will be important to pay close attention to. Consider researching comparable dental practice space in the area to help ensure you are getting a fair rental price. If there are any improvements you wish the landlord to foot the bill for prior to moving into the space, consider negotiating this into your lease as well. Such requests for tenant improvements are common, especially for long term leases.
You may also want to negotiate the inclusion of certain provisions in your lease. For instance, you may wish to have the right of assignment. Your lease is, after all an asset. Having the right to pass on the leased space could be an integral part of a sale should you ever wish to sell your practice. You may also want a provision for the right of first refusal in your lease. This means that you would be given the first chance to purchase the property should the landlord ever wish to sell. While you may not be ready to purchase at the beginning of establishing your practice, having the option to buy the property down the road could be a great business decision.