The Top 3 Traps in a Dental Office Lease

The details in your dental office lease can cost you hundreds of thousands of dollars in traps and pitfalls, easily making it one of the most significant documents you will ever sign. Landlords use the lease as a tool to make as much money as they can from a dentist, making it particularly critical that the terms and clauses within it are set up to help protect you, rather than hinder you.

Top 3 Traps in a Dental Office Lease:

1) Relocation Clause: Does your lease give your landlord the right to relocate your practice on 30 days’ notice? Property owners are fully aware that a dental office is an expensive and difficult–to-relocate business that can take months to rebuild. Two things can put you out of business in the event you are relocated:

  • You are forced to absorb the cost of rebuilding your practice from scratch which can be upwards of $350,000, not to mention moving costs or the renovation of your current space.
  • During the move, you may be faced with 3 – 12 months of practice “dark time” before the move is complete, meaning there is no incoming revenue, and business is at a standstill.

2) Death & Disability Clause: Is there a death and disability clause in place that protects you if something unexpected happens and you’re unable to work? Is the lease set up so that your family/estate isn’t stuck paying off your debts or monthly rent?

3) Assignment Clause: Do you plan to sell your office sometime in the next 10 – 20 years? Are you sure your lease permits you to sell your practice at all? Unfortunately, many do not. It’s critical for dentists – more so than any other type of tenant – to ensure that the lease agreement is set up properly to allow for the sale of the practice and lease transfer. If not, the property owner can either prevent the sale from happening or collect proceeds from the sale in exchange for granting permission to sell.

These sections of a lease agreement, among others, are not often taught to dentists at any point in their careers, yet the success of your practice and eventual exit from dentistry depend on them. The best way to ensure that your lease is set up with fair and affordable terms is to have the agreement reviewed by dental office leasing experts before you sign it.

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