A medical office lease is a binding business agreement that needs careful negotiation. Any mistakes in the lease or poorly negotiated leases can make it difficult for you to sell your practice, ding you for hundreds of thousands in “key money” if you move, and leave you responsible for paying office rent after retirement. While medical office landlords could be inclined to supply this relief instead of seeing their tenants leave of business, laws specific to the healthcare sector could open landlords up to compliance issues.
These laws could also be applicable when a physician or healthcare practitioner or an instantaneous loved one of a physician is leasing or subleasing from another healthcare provider or hospital.
How to avoid Hidden Risks in Your Medical Office Lease
Here are some common hidden risks associated with medical property leases that healthcare professionals need to avoid when signing a medical office lease agreement.
Signing a Private Guarantee
A personal guarantee may be a legal contract between a landlord and tenant to ensure a business’s selected obligation. Personal guarantees offer the landlord additional recourse within the event of a default lease agreement. Private security implications are quite significant because the tenant’s assets, like a house, retirement funds, cars, et al., are in danger. Landlords always prefer a personal guarantee. However, it’s wise for tenants not to choose it, especially when it involves Leasing Medical Office Space.
An efficient property appraiser’s assistance can help avoid signing a personal guarantee when leasing a medical office block.
Underestimating The Tenant Improvements
Tenant improvements for a medical office property are often quite expensive. Developing or renovating a medical space to suit unique requirements can range from $50 to $250 per sq foot, counting on myriad factors like the prevailing medical office suite’s current condition, level of specialized requirements for the practice, and personal choice of improvement finishes. It’s essential to understand the medical suite’s current situation and what you’re stepping into before signing a lease. Reputed land valuation services can help you assess the present condition of the medical office block by creating an in-depth and competitive report and allowing the development project while you’re analyzing your options.
Underestimating The Timeline and Complexity of Build-Out
Just like the value of tenant improvements varies, the complexity of a project and timeline for the finished space delivery vary. For example, a practice requiring digital x-ray units and a surgery suite will take longer to style, permit, and develop a healthcare practitioner’s office than an office requiring individual exam rooms. It’s advisable to hire a good team of experts from the outset, do the planning, obtain all necessary permits, and develop the suite. Guidance of professional services, like business valuation services in NY, can prove worthy
Trusting Landlords and Their Agents To Represent You
Never calculate landlords’ agents to represent you when managing healthcare land dealings. It is often because landlords hire ‘full service’ land agents to seek doctors and other healthcare professionals to hire out their vacant medical office buildings. These agents work for their landlord employers to maximize the rent paid by the medical tenants. On the contrary, tenants want to pay less rent. If they follow the landlord’s agents’ recommendation, they’re sure to get disappointed later since these agents’ true allegiance is in the interest of the landlords and not tenants. It might be known to hire professional property appraisers when leasing a medical office block than counting on landlords’ agents.
Do It Yourself
Even though the adage ‘Physispendn, heal thyself’ could also be true, it’s always better to hunt for professional advice to find out market conditions and crack the most straightforward possible land deal when it involves land. Every medical space is different, and each landlord’s situation is exclusive. Land appraisers have the most superficial knowledge of the land market, and that they are conscious of all the latest changes and market trends. Their guidance is worthy to assist medical tenants set fair rent when leasing a medical office block for their practice. As they’re conscious of all land terminologies and market situations, they help healthcare professionals sign the lease safely and with no concerns.
So it’s always better for physicians to calculate professional advice than performing on their own when it involves leasing healthcare land for their practice.
