The language in a dental office lease is directly related the value of a practice, and the ability to seamlessly sell or transition out of dentistry.

The key to a smooth, risk-free transition lies in the provisions and clauses of the dental office lease agreement.

The Harsh Reality of the LeaseNegotiating the lease agreement

  • 85% of all dentists have a lease that may prevent them from ever selling their dental practice.
  • 20% of dentists lose the ability to sell their practice each year.
  • Thousands of dentists have learned that ‘assigning’ their lease to a prospective buyer results in the landlord’s right to terminate the lease.

Ensuring your dental office lease is set up to support your practice sale well in advance of your transition will help you avoid expensive traps, enabling you to retire/transition smoothly and safely.

Best Practices for Transitioning Your Practice

Be Prepared & Plan Ahead

Don’t wait until the last minute to begin thinking about your dental practice sale; negotiating your dental office lease takes time and planning. Start preparing for your practice sale at least 5-10 years in advance of your transition to ensure that the details in your lease support your long term career and practice goals.

Review & Identify Risks in the Lease

It is important to clearly understand the details in your lease agreement in order to identify potential risks and pitfalls you may face upon transitioning.

The “assignment clause”, for instance, has a direct impact on the ability to sell your dental practice. When ready to retire or transition, many dentists are horrified to learn that the assignment provision in their lease requires them to ask the landlord for “consideration” or permission for the assignment to happen.

Female and male dentist

Sometimes this provision even gives the landlord permission to deny their request altogether, arguing that the proposed assignee does not have the same “financial standing” the current tenant has. Verbiage in the assignment clause may also allow the landlord to raise rent upon the request to assign the dental lease, or a right to all of your practice sale proceeds.

Thoroughly review your lease for these risks and more in order to uncover and negotiate out any terms that may be detrimental to you and your transition plans.

Hire Professionals

Negotiating a lease takes time, effort, strategy, critical thinking, patience, and a strong expertise in commercial real estate and dental leasing language. If you don’t feel confident negotiating your own lease, or feel you don’t have the skill set necessary to review or negotiate the terms in your own lease, don’t be afraid to seek out professional help.

The details in your lease will outline your financial responsibilities and obligations as a tenant to your landlord for the next ten years or more; there is no room for error. By hiring professional dental lease negotiators to handle the process on your behalf, you’ll save yourself time and stress.

Prepare for your practice sale well in advance to allow yourself enough time to negotiate fair leasing terms that will protect your investment, and support a seamless, successful and profitable transition.

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