At Dental & Medical Counsel, we often see optometrists jump into lease agreements that look good on the surface but carry hidden financial or legal pitfalls. Whether you’re expanding to a new location or launching your first private practice, the terms of your lease shape everything from overhead costs to patient accessibility.
Next, we will go through a few vital points you should discuss with your attorney before signing on the dotted line. By taking a proactive, detail-oriented approach, you can secure a lease that aligns with your professional goals and protects your bottom line. Now, take a look at the most important tips to know before signing an optometry lease agreement below. Then, contact us to make sure you put your optometry practice in the best possible position to be successful.
Understanding local zoning laws is critical. Some municipalities treat optometry as a medical service, requiring a specific zone or additional permits. If your landlord hasn’t confirmed these approvals, you risk discovering mid-lease that you’re not allowed to conduct certain procedures.
In busier commercial areas, confirm whether your sign meets local guidelines. Some landlords have strict rules about external signage or window displays. Always ensure that the location supports future growth, especially if you plan to add new equipment or diagnostic services. This is a key part of your optometry startup checklist.
CAM fees often cover shared facilities such as parking lots, hallways, and landscaping. While these charges help maintain a clean, appealing environment for patients, they can inflate monthly costs significantly. Request an itemized breakdown and confirm if certain improvements benefit your practice specifically or if you’re effectively subsidizing other tenants.
Watch out for vague language that allows the landlord to tack on extra fees beyond standard maintenance. Ask what’s included, which could be trash disposal, security, or utility bills for common areas. If the CAM charges can jump unpredictably, negotiate an annual cap to keep budgeting stable.
Tenant Improvement (TI) allowances subsidize the cost of constructing or renovating your space. When setting up an optometry clinic, you may need specialized plumbing for exam rooms or advanced electrical setups for diagnostic equipment. Negotiating a higher TI can dramatically reduce your initial out-of-pocket expenses.
Keep in mind that not all landlords handle the build-out process equally. Some offer a flat allowance and let you manage construction, while others prefer to arrange contractors themselves. Clarify who owns the improvements once your optometry lease ends—some deals require you to revert the space to its original layout upon departure.
Exclusivity clauses prevent the landlord from renting space to a direct competitor within the same complex or building. This is especially helpful in retail centers where another optometry clinic could steal patient traffic. If your lease lacks an exclusivity clause, another tenant could provide nearly identical services next door.
Note that exclusivity is often location-specific. In a large commercial development, a landlord might restrict certain spots to avoid conflicting businesses. If you do secure exclusivity, remember it generally doesn’t protect you against online or remote services—just physical brick-and-mortar competition.
If your practice expands or relocates, you might need to sublease or assign your current space to another optometrist. Review these clauses thoroughly to see if the landlord imposes extra fees or retains the right to block potential subtenants. A landlord’s approval process might be subjective, so requesting “not to be unreasonably withheld” language can safeguard you.
Sublease rights can also provide a financial buffer if your office layout includes extra rooms or specialized equipment that could benefit another practitioner. Having a separate optometrist or related specialist on your premises can offset your overhead while boosting patient convenience. However, all sublease agreements should align with both your existing lease terms and local regulations to prevent disputes down the line.
Subleases also come in handy if you plan to share space with another related professional—like an ophthalmologist performing on-site procedures. Ensuring flexible terms can avoid friction if you decide to bring in additional services. Conversely, a restrictive assignment clause could tie your hands, forcing you to continue paying rent if the landlord rejects a proposed subtenant.
A well-defined “permitted use” clause ensures you can provide the full range of optometric services without the landlord’s future objections. If you plan to add advanced procedures or retail eyewear sales, incorporate that language now. Avoid broad statements like “general medical services,” which may miss specialized aspects of optometry.
Even sub-categories of eye care—like pediatric exams or ocular disease management—should be explicitly included if you anticipate offering them. Getting this written out prevents the landlord from challenging additions such as new diagnostic technology or minor surgical procedures. In some cases, you might also want to confirm you’re permitted to expand into cosmetic treatments or aesthetic services, if relevant.
Similarly, check if your lease sets mandatory operating hours. If you anticipate extended evening or weekend appointments, confirm the building’s climate control and security measures remain functional. The last thing you want is to turn away patients because the HVAC system shuts off after 6 p.m.
A renewal option locks in the right to extend your lease after the initial term. This is critical for patient continuity—constantly moving offices can drive patients elsewhere. Negotiate a fair formula for rent escalation, so you’re not blindsided by huge increases.
Deciding on renewal should never be rushed, so build in a generous notice period to weigh financials and patient growth. Knowing the precise timeline for informing your landlord helps you plan the practice’s future staffing and equipment investments with greater confidence. If your optometry office relies on specialized machinery or a carefully curated interior layout, the stability of a renewal option can significantly reduce the stress of relocating.
Determine how and when to notify your landlord of renewal. Missing the notification window could force you to scramble for a new space, jeopardizing your patient base. The best renewal clauses provide multi-year windows and predictable rent adjustments, allowing you to project financials more accurately.
Landlords often include rent escalation clauses to keep pace with inflation or property value increases. While such clauses can be reasonable, watch for steep or frequent hikes that outstrip typical market rates. For example, a 5% annual jump in an area where average increases hover around 2% can stress your budget.
Some leases link rent to an external index, like the Consumer Price Index (CPI). This approach is more transparent but still depends on economic factors you can’t control. Others use fixed percentages for each subsequent year. Whatever the method, aim to balance predictability with flexibility, ensuring you can adjust to real-world financial conditions.
A personal guarantee holds you personally liable if your practice fails to pay rent. Landlords often require these from new or small practices lacking extensive credit history. While personal guarantees might be unavoidable early in your career, negotiating a “burn-off” clause in your optometry lease can limit the timeframe or reduce the amount you’re liable for over time.
If possible, propose that the guarantee end after a set number of timely rent payments. This arrangement still assures the landlord of your commitment but offers you an exit path from indefinite personal exposure. Bear in mind that even partial personal liability can impact your finances severely if the practice encounters difficulties.
Leases typically require that you hold certain types of insurance, like general liability and property coverage, to safeguard the landlord’s interests. Some may require you to name them as “additional insured,” ensuring they’re covered if a legal claim arises on the property. Check for any demands around malpractice coverage or expanded liability for specialized devices.
Indemnity clauses generally mean that you’ll cover the landlord’s losses from legal claims tied to your practice. If the agreement is overly broad, you could be responsible even for events outside your control, such as building-wide electrical failures. Narrowing indemnities to your direct actions or omissions prevents bearing unfair risks.
A thorough lease includes clear steps for handling nonpayment or policy breaches. This might involve a grace period to cure the default before eviction notices are served. Understanding these clauses can spare you from abrupt lease termination if you temporarily face cash flow issues.
Also, check how disputes, like disagreements over CAM fees or property upkeep, are resolved. Some leases mandate mediation or arbitration rather than court proceedings, potentially saving time and money. While such options can be advantageous, confirm the location and cost-sharing rules so you’re not caught off guard.
Each clause in your lease agreement can affect your financial stability, operational efficiency, and future flexibility. By scrutinizing zoning, rent escalation, and every point in between, you’ll safeguard your optometry practice from unpleasant surprises. A well-structured lease not only meets your current needs but also accommodates growth, whether you’re adding advanced equipment or bringing on more staff.
At Dental & Medical Counsel, we specialize in helping optometrists secure lease terms that protect long-term interests. From negotiating personal guarantees to clarifying permitted uses, our legal expertise ensures your contract supports your professional goals. It is important to rely on an optometry practice lawyer who can review your lease and ensure you understand exactly what it means. Contact us today for tailored guidance before you finalize that lease, and let us make sure your lease matches the goals of your practice well.
Frequently Asked Questions
Q: What zoning issues should I consider before signing a lease for my optometry practice?
A: Some municipalities classify optometry as a medical service, which may require specific zoning or permits. Always confirm with the landlord that your practice’s services are permitted in the space.
Q: What are CAM (Common Area Maintenance) fees, and why do they matter?
A: CAM fees cover shared spaces like parking lots and hallways. Ask for a detailed breakdown and watch out for vague language that could allow landlords to add unexpected charges.
Q: What should I know about Tenant Improvement (TI) allowances?
A: TI allowances help pay for build-outs like exam rooms or electrical upgrades. Clarify who manages construction and whether improvements must be removed when the lease ends.
Q: How can an exclusivity clause benefit my optometry practice?
A: Exclusivity clauses prevent landlords from leasing nearby space to competing optometry services, protecting your patient base and foot traffic—especially in retail centers.
Q: Why are sublease and assignment clauses important?
A: These clauses affect your ability to sublease or transfer your space. Ensure the lease includes fair approval language and flexibility to grow or share your space with other professionals.
Q: What is a “permitted use” clause, and what should it include?
A: This clause defines what services you can offer. Be specific—include all procedures, diagnostics, eyewear retail, or future services you might want to add to avoid restrictions later.
Q: What should I know about renewal options in my lease?
A: Renewal clauses protect continuity. Negotiate reasonable rent increases and set clear notice deadlines to avoid last-minute decisions or losing your location.
Q: How do rent escalation clauses impact my budget?
A: These clauses allow rent increases over time. Ensure the escalation method (fixed %, CPI-based, etc.) is fair and predictable so you can plan long-term expenses.
Q: What is a personal guarantee, and can I negotiate it?
A: A personal guarantee makes you personally liable for the lease. Try negotiating a “burn-off” clause that limits your liability after a certain period of on-time payments.
Q: What should I watch for in indemnity and insurance clauses?
A: Make sure you’re only responsible for your own actions, not building-wide issues. Confirm what insurance is required and whether the landlord needs to be listed as “additional insured.”
Q: How are disputes and defaults typically handled in a lease?
A: Look for clauses outlining grace periods for missed payments and whether disputes must go through arbitration or court. Clear procedures protect your practice from abrupt eviction or costly delays.
About the Author
At Dental & Medical Counsel, PC, we understand navigating the legal process can be tricky. We believe every optometrist deserves the best advice and service so optometrists can do what they do best, treat their patients. We make their lives easier by providing expert guidance, so they can focus on their personal and professional aspirations. We are optometry attorneys.
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About Ali Oromchian, Esq.
Your Optometry Lawyer
In addition to being a optometry lawyer for almost 20 years, Ali is also a renowned speaker, throughout North America, on topics such as practice transitions, employment law, negotiation strategies, estate planning, and more! Ali has helped hundreds of optometrists realize their professional goals and looks forward to aiding you in navigating the legal landscape.
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