Professional signing a contract

What to Look For In Your Dental Practice Lease

To any business owner, a lease agreement is one of the most important contracts that will need to be signed. Dental practice owners are no exception to this. Getting the right lease in place with favorable terms is a foundational step to setting up your dental practice for continued success and minimal headaches. Remember, even when you are presented with a standard form lease, the terms of a lease are negotiable and should usually be negotiated. Let’s take a look at some of those key lease provisions you should keep an eye out for when looking for a property to open your dental practice on.

What to Look For In Your Dental Practice Lease

The first thing you need to look for in your dental practice lease is what type of lease you will be signing. There are a variety of lease types and all come with specific terms of which you will need to be mindful. Try to familiarize yourself with some of the basic and more common lease types so that you are prepared to understand the differences between them and which would be a better fit for your dental practice. 

There are, for instance, two central lease types that you may encounter. These lease types are the triple net lease and the gross lease. In a triple net lease agreement, the tenant agrees to pay for real estate taxes, building insurance, and maintenance costs. With a gross lease, the tenant agrees to pay a flat rental amount which will go to cover almost all expenses that are associated with the leased space.

Let’s get down to some of the key terms of the lease that you should not only look for and understand, but also consider negotiating. Many dental practice owners are too quick to sign on the dotted line and end up with a lease that will cause issues down the road or that come with less than favorable terms and the practice ends up suffering as a result.

Here are some of the key terms of a lease:

  • Term
  • Options to renew
  • Rent
  • Upgrades
  • Assignments (this can be critical if you wish to sell your practice within the term of the lease)
  • Personal guarantee (while a landlord may require your personal guarantee, you can negotiate limiting the duration that this personal guarantee will run)

You should also look for things in your lease such as the right of first refusal. When this is in your lease, the landlord must give you the chance to buy the property before selling it. The right of first refusal is especially important when you consider what a big benefit the right location for your dental practice can be for the business as a whole.

Signage clauses in your lease can also be important to review and negotiate. Some landlords may place undue restrictions on your ability to put signs up for your dental practice. People need to be able to find their practice and signage plays a big role in this. Makes sure the signage terms in the lease allow you to properly display signs for your business.

Dental Law Attorneys

At Mahan Dental Law, we can review your dental practice lease and negotiate the most favorable terms on your behalf. Let us help you set your dental practice up for continued success. Contact us today.