Facility Lease vs. Purchase

Facility Lease vs. Purchase

Many dentists lease, rather than purchase, their office space. Here are some things to consider before you sign your lease. (Make sure your attorney reviews the lease before you sign.)

The lease should include:

  • A warranty to practice dentistry
  • A description of the facility and layout
  • Warranty and condition of the facilities
  • Permission to alter the facilities without having to restore them to their original condition at the end of the lease
  • Any guarantees of services to be provided by the landlord – these should be specified
  • The amount of rent payments to be made each month, the day of the month by which rent payments should be made, and where the payments must be remitted
  • The condition of the premises, especially if the space is not completed
  • A provision stating a warning will be granted before eviction
  • A termination of the lease and a suspension of rent obligations if the building is damaged
  • A clause stating the landlord will be responsible for maintenance and repairs
  • A provision relieving the tenant of fire liability

The following should be provided, if possible:

  • Option to renew and an option to terminate
  • Escape clauses: death and/or disability
  • Leasehold improvement allowance
  • A right to sublease the premises
  • A right to share space

Avoid the following provisions:

  • Escalation provisions in taxes, utilities, operating expenses, and cost of living
  • Any clause that relieves the landlord of liability for damage due to falling plaster, broken pipes or plugged drains
  • Any clause that continues the tenant's liability after the lease has expired
  • Any clause that automatically renews the lease unless the tenant gives notice
  • Unlimited viewing of the premises by the landlord; limit this to the last 30 days of the lease
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