Dental and Medical Counsel Blog

7 Key Dental Practice Lease Negotiation Points

April 26, 2023
7 Key Dental Practice Lease Negotiation Points

If you want to put your dental practice in a position to be successful, you need to identify the right commercial real estate. While there are plenty of options available, you also need to think carefully about your lease terms. This refers to the components of the contract that both you and the property owner will have to follow. As you go through the lease negotiation process, you need to make sure you have a lease that is conducive to the success of your dental practice.

What are a few of the most important lease terms that you need to consider as you go through the lease negotiation process? Take a look at a few important points below, and identify the right commercial real estate for your dental practice.

1. Lease Duration

One of the first things you need to think about is your lease duration. This refers to how long your lease will last. Lease terms can vary significantly in terms of their overall duration. In general, you can secure a lower rental rate if you are willing to sign a longer contract. On the other hand, you do not necessarily want to pigeonhole your practice in the same location if you find a better location for your dental practice.

If you are signing a contract for the first time, you may not be 100 percent sure that your location is going to work out in the long run. If that is the case, you may want to find commercial real estate in another location that might be better for your patient base, particularly if you plan on purchasing property for your dental practice down the road. On the other hand, in exchange for this type of flexibility, you might have to pay more rent per month. Always think about your lease duration before you sign on the dotted line.

2. Get an Option To Renew

During the lease negotiation process for your dental practice, you may want to ask for an option to renew. What this means is that the landlord should give you the option to renew your lease when the contract is up, as long as you do not break any of the terms of the lease. In particular, you want your landlord to give you an opportunity to renew the lease before the landlord tries to rent the property to someone else. It can be very expensive to move your dental practice, and if you are happy in your location, you probably don't want to move. Therefore, talk to your landlord to see if he or she is willing to give you the option to renew the contract before you sign a lease.

3. Compare Your Rent To Other Rents in the Area

How do you know if you are getting a fair rate for your dental practice? The only way to figure this out is to compare your rent to other rents in the area. For example, you may want to take a look at some of your competing dental practices. Then, you might be able to go online to figure out what their overall rent is. While you might not be able to access their rental contracts, you should be able to look up the address to figure out what a solid rent estimate should be.

Keep in mind that your rent can vary significantly depending on the square footage of the property. If you have some idea of how expensive your rent should be, you can take a closer look at the contract to see if you are getting a good deal or not. If you feel like the landlord is charging too much, you may want to return to the lease negotiation table to review the lease terms and see if you can get your rent reduced.

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4. Ask for Upgrades

If you decide to sign a long-term lease with the landlord, see if you can ask for some upgrades to the property. You should be given an opportunity to walk through the property and review it before being asked to sign the contract. If you see significant issues with the property that could have an impact on your ability to operate efficiently, you may want to talk to the landlord for some upgrades.

For example, you may want the landlord to improve some of the landscaping out front in an effort to make a better first impression on your potential patients. Or, you might want to ask the landlord to improve the lighting in the patient care areas to make it easier for your staff members to do their jobs. You might even want to ask the landlord to rearrange the layout of the building to make it more conducive to your patient flow.

5. Right of First Refusal

Because you do not own the property, you will still be subjected to the whims of the landlord from time to time. If you can get these written into the contract, you may be able to give yourself a bit more security. For example, you may want to ask the landlord to give you the right of first refusal in the event that the landlord decides to sell the property. What this means is that the landlord will provide you with an opportunity to purchase the property first if he or she decides to sell. That way, you don't have to worry about moving on short notice.

6. Marketing and Signage

You must make it as easy as possible for your patients to find your dental practice. This means that you will have to post some signs outside. Remember that the landlord still owns the property, so you may need to get signage included in your rental contract. You should make sure that signage is written into the lease. Ask for it in writing, so you know that posting signs outside will not be a violation of your rental contract.

7. Dental Materials, Products, and Solutions

You probably have some medications, controlled substances, oxygen tanks, and numerous other items in your practice that could qualify as hazardous materials. This is not commonly included in rental leases, so you need to discuss this with the landlord before you decide to open your dental practice on that property.

What this means is that you need to make sure the landlord explicitly says that hazardous materials are permitted on the property when you sign your lease. Otherwise, you could be found in breach of contract. While you might think that your landlord won't mind, you need to protect yourself by getting this written into your lease.

Negotiate Your Lease With the Help of Dental & Medical Counsel

As you look for commercial real estate for your dental practice, there are a lot of issues you need to consider during the lease negotiation process, including your lease duration. We are Dental & Medical Counsel, and it would be our pleasure to act as your legal advocate during the lease negotiation process. Make sure you have a lease that puts your practice in a position to be successful. Contact us today to speak to a member of our team.

Frequently Asked Questions

Q: What is a dental practice lease?

A: A dental practice lease is a legally binding contract between a dental practice owner (tenant) and a landlord that outlines the terms and conditions for renting a commercial space for the purpose of operating a dental practice.

Q: Why is lease negotiation important for a dental practice?

A: Lease negotiation is important for a dental practice as it can significantly impact the financial and operational success of the practice. Negotiating favorable lease terms can help secure a desirable location, manage costs, and protect the practice from potential risks and liabilities.

At Dental & Medical Counsel, PC, we understand navigating the legal process can be tricky. We believe every doctor deserves the best advice and service so doctors 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.

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About Ali Oromchian, Esq.

Ali Oromchian, JD, LL.M. is the founding attorney of the Dental & Medical Counsel, PC law firm and is renowned for his expertise in legal matters

In addition to practicing law 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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