Are You Prepared to Negotiate a Medical Lease?
A medical lease means more than simply acquiring the space for your medical practice. In fact, for most medical professionals, real estate represents the second-largest expense after personnel.
Whether you have one location or several, you need to understand cost, stability and flexibility. Medical lease contracts must be properly administered, periodically audited and systematically managed to ensure they support your business strategy.
Because medical office space users and physician practices don’t typically relocate to new buildings as often as general office tenants, they are not in the market as often. It’s also interesting to note that competition for new patients is on the increase and directing doctor practices to non-hospital campus properties for convenient access locations.
So when it comes time to take on or renew a medical lease are you confident that you understand all of the moving parts well enough to make cogent decisions?
Here are some valid medical lease considerations before you make the decision to do it on your own or seek the expertise of tenant representatives who live and breathe this stuff.
- Use Issues – Medical tenants use hazardous materials and biomedical waste, so special equipment is required and your lease must ensure compliance to these issues.
- After Hours Access – Medical tenants are on call for patient needs which can include all hours of the day or night. Property access is imperative
- Compliance with the American Disabilities Act (ADA) is a must for patients’ special access needs.
- Landlord Inspection and Privacy – Medical tenants have restricted areas for health reasons. Access to these areas must be limited, even to landlords.
- Anti-Kickback Issues – Compliance with ‘Safe Harbors’ under Federal anti-kickback laws must be understood and addressed in your lease.
- Exclusivity Provisions – This prohibits your landlord from any direct competition within the same vicinity of your medical lease.
- Death and Disability Clause – If you die or become disabled, provisions within your medical lease absolve you from certain liabilities.
- Tenant Improvements – This can become complicated without addressing details in your medical lease. Everything from architects to contractors, to new vs existing walls, doors, etc. If your tenant representative has access to these resources you are one step ahead.
The advantage of working with a professional medical tenant representative who knows medical real estate is multi-fold. They can help you assess how long-term factors will affect your current lease scenario. They can bridge the gap between you and the landlord to help retain flexibility with your lease terms. And they know where to look for the best medical lease properties, often before they’re even on the market.