Benjamin Franklin said that “without continual growth and progress, such words as improvement, achievement, and success have no meaning.”
Growth and progress are key to the success of your dental practice. Are the confinements of your commercial office lease hindering your growth?
If you’re looking for ways to maximize your practice revenue potential with future plans to grow your practice, then you’ll need to consider the “Use” clause in your dental office lease.
What is the “Use” Clause?
The “Use” clause in the lease defines how you’ll use the rented space, and is extremely important because it states:
The tenant’s right to use its premises for its specific business.
The activity or activities in which the tenant is allowed and obligated to participate in within the premises.
The landlord’s control of the uses within the premises.
Where is the “Use” Clause Found?
The “Use” clause is often found on the first page of the dental office lease. Typically, it will include the short version of the legal definition of “what you can do in the space”. Further, there will be a more detailed legal meaning somewhere in the standard form lease.
How is the “Use” Clause Used?
Landlords typically use this provision to restrict tenants to using the premises for a specific purpose only, therefore giving themselves the flexibility to lease other space in the building to a variety of tenants without restriction.
On the contrary, dental tenants can move to negotiate exclusivity rights into the dental office lease to restrict the landlord from leasing other spaces within the building for the same purpose, protecting themselves from competition moving in.
For example, in a large medical building or retail strip plaza, a dentist will want to negotiate exclusivity rights in parallel to the “Use” clause that restrict the landlord from leasing other space in the building to competing dentists.
The “Use” Clause Should Allow You Room to Grow, Adapt or Change
In order to maximize your revenue potential and accommodate future growth or changes in your practice, you need to ensure that the “Use” clause is structured in such a way as to allow you flexibility in conducting your practice. For example:
If you are a general dentist you may want to specialize at some point in your career. Ensure the “Use” clause allows for this by listing out potential services you may wish to add to your business when you branch out.
If you are currently a solo practitioner but want to leave yourself the option to grow your dental practice down the line, ensure your lease allows you to bring in associates. Also, ensure that the “Use” provisions in the lease do not restrict you from offering additional services (i.e. cosmetic services, dental spas, orthodontics).
If you want to align your services with other doctors or professionals to generate additional revenue and add convenience to your patients’ treatments, ensure that your “Use” provisions will accommodate this partnership.
Watch Out for Traps in the “Use” Clause
Whether your future interests will be restricted or protected greatly depends on the “Use” language in your dental office lease.
Restrictive wording, such as “solely for general dentistry and no other use” is problematic if you want to add a specialization to your dental practice, such as orthodontics or endodontics down the line.
Flexible wording, such as “for oral health and related activities” captures current and future use of a dental practice without being restrictive. This wording is broad, but not vague — it accurately captures current uses of the space while allowing room for growth.
What If Your “Use” Clause is Too Restrictive?
If you’ve already signed your office lease without considering the “Use” language, then now is a good time to examine the details of the clause. If it’s too restrictive, you can move to renegotiate the details of this clause at renewal time. The ideal time to begin planning your renewal negotiation strategy is 18-24 months before your lease expires, giving you lots of time to bring your landlord to the table and negotiate a lease that’s fair and supports your future goals.
Benjamin Franklin understood the importance of growth and progress for success. For optimal practice growth potential, set up the “Use” clause in your dental office lease with the flexibility necessary to grow your business.
Questions about the “Use” or “Exclusivity” provision in your dental office lease?
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