a dentist looking at paper documents and is considering buying a dental practice

What to Consider in Reviewing Your Dental Practice Lease

In establishing your dental practice, there are several legal documents that will cross your desk. One of the most significant ones will be your dental practice lease agreement. Resist the urge to sign off on this without a second glance as it can have profound impacts on your business, not to mention the fact that rent will be one of your biggest business expenses. Carefully review this critical legal agreement and help avoid some costly and extensive headaches down the road. Remember to review the terms of the agreement and that most things in a lease agreement can be negotiated. Do not let go of this power by simply signing off on the terms as is. Keep your business’s best interests at heart.

What to Consider in Reviewing Your Dental Practice Lease

While your dental practice lease is likely to be packed with terms that you should review and, if not optimal, negotiate, we are going to take a look at a few of the key terms that should be given special attention. To start with, you should be sure to understand what type of lease you are signing. As there are two main types of leases, it is likely you will be signing either a triple net lease or a gross lease.

With a triple net lease, you, as the tenant, are agreeing to pay for the real estate taxes, maintenance cost, and building insurance of the space you are leasing. This kind of lease is also likely going to mean that you will be responsible for paying prorated taxes on the common areas of the building which can include places like the lobby and the parking lot. Alternatively, with a gross lease, you will be paying a flat rental amount. Also known as a “full-service lease,” the landlord in this type of lease will be responsible for paying almost all expenses associated with the leased space. Many prefer gross leases because the flat rental amount allows for more easier budgeting as a fixed overhead cost.

You will also want to take careful consideration of the length of the lease as it can have a notable impact on the success of your practice. The goal is to sign a lease that is not too long that you are locked into renting a space where you could be overpaying on rent as the market experiences its natural dips. You also do not want to sign a lease that is so short that you are unable to build up goodwill for your practice before you are forced to relocate. It’s often best to aim for a midway-term lease with an option to renew should the space prove to be a good fit for your practice.

Dental Law Attorneys

These are just some of the foundational terms of a lease. There are many more considerations that can have a big impact on your dental practice, its success, and its longevity. Talk to the team at Mahan Dental Law about what lease terms would serve you best. Contact us today.