Have you ever considered what happens when you miss your veterinary office lease renewal deadline or expiry date?
Timing is crucial, and letting your lease expire without a proper renewal plan can lead to a significantly negative financial hit to your occupancy costs, and to the overall value of your veterinary practice.
Critical Dates to be Aware of in Your Veterinary Office Lease
The expiration date is a critical date to be aware of in your lease agreement. Being mindful of this date with the ability to negotiate your lease terms far in advance of its expiry will work to your advantage. The length of most lease terms is typically five or ten years.
“Option to Extend” Expiration Date
The “option to extend” or “renewal” expiration date is the last day you can exercise your option to extend the office lease term. Animal health professionals benefit from negotiating options into their leases because it provides flexibility for their practices in the future. Landlords view “options” as the sole benefit of the tenant, and therefore often place limitations as to when they can be used with deadlines.
Why you should never miss your renewal or expiry date
If you accidentally miss your veterinary office lease expiry date, you become a month-to-month or “overholding” tenant. This means that you’ve lost one of the most important protections that an office lease agreement offers any practice: long-term security in your practice location. The last thing you want is to be relocated from your current practice, being forced to rebuild it elsewhere, incurring substantial costs along the way to move.
At this point, technically speaking, both you and the landlord have the right to terminate the lease by providing only 30 days’ advanced written notice to the other party. Imagine getting notice that your landlord has terminated the lease, is kicking you out of the building, and you have only 30 days to relocate? This is a harsh reality that thousands of animal health professionals face every year.
Your Monthly Rent, Doubled!
Allowing your lease to expire without a pre-planned renegotiation or renewal strategy may lead to a significantly negative financial hit. Many lease agreements state that as soon as you go past your expiry date, the landlord has the right to charge you twice the normal monthly rent for each month past the expiry date. That rental hike is enough to put any doctor out of business. We advise you to check the overholding clause in your lease as soon as possible to ensure that you’re aware of what your penalty rent will be.
How to Avoid These Costly Leasing Mistakes?
Never miss an expiry or renewal date again! Review your lease and identify your expiry date and option to renew deadline. If you have 24 months or less remaining on your veterinary office lease, begin to prepare your lease negotiation strategy now, leveraging the remaining time you have left to structure your lease properly.
Your landlord knows very little about the business of animal health, but what they do know is that the closer they get you to the end of your term, the less time and leverage you have to negotiate a good deal with your landlord. Achieving a good lease with fair and affordable financial terms requires extensive research, preparation, and a strong office lease negotiation strategy, so don’t wait, be proactive, and track your office lease dates!
Questions about your veterinary office lease?
Schedule your personalized consultation with a leasing expert today!