You’ve found the perfect location for your new clinic or perhaps you're renewing an existing lease, now what?
It takes much more than doctor marketing, skilled therapists, and the latest equipment to run a successful clinic - location is everything.
While this is true, the lease terms, rental rate, and various other things (like parking) can all dictate much of your clinic’s success or failure as well.
Don't let the landlord bully you into signing your lease - especially before you've had time to thoroughly evaluate it and ask for what you want and need.
In this article we've got some top tips to help get you prepared for your upcoming lease agreement. Before you sign on the dotted line, here are ten fatal flaws to look out for when negotiating your lease.
Take your time and do your homework.
#2 Don't forget the "Option to Renew" clause
Always ask for an option to renew.
#3 Negotiate an extended fixturing period
If you are building your physiotherapy or chiropractic clinic from scratch, try to extend the fixturing period for as long as you can.
#4 Demand a tenant improvement allowance
Depending on the market, some landlords offer tenant improvement allowance to entice the tenant to lease the space. The tenant improvement allowance is a function of your lease terms and your lease rates.
#5 Beware of the “Restore the Premises” clause
Always read the fine print.
#6 Don't forget the "Exclusive Use" clause
Make sure to protect your business with an exclusive use clause.
#7 Signage, Signage, Signage
Both signage visibility and exposure are critical to your clinic - it's a valuable part of your marketing.
#8 Don't forget about the free parking
Who wants to pay for parking? No one - especially patients and your staff!
If you are set on a location where there is no free parking offered, negotiate with the landlord for designated parking spots for patients, or at the every least, reduced rates for parking fees.
#9 Beware of the "Demolition" clause
Verify that your lease does not have a demolition clause.
#10 Personal guarantees
If possible, never offer your personal guarantees on the lease.
- Subleases & Assignments: Just in case things don’t work out, you need the ability to sublease the space so you find another tenant to rent your space. It may also be worth consdiering certain clauses for selling your clinic to other parties, you just never know what might happen down the line.
- Rent and Rent Increases: Try indexing your rent increases to an index like Consumer Price Index (CPI) so that you don’t get any big jumps. Also add the stipulation that if the index goes down, your rent does, too.
- Lawsuits: Check to ensure you are not responsible for any legal costs if the you and your landlord were to have a legal dispute in the future.
- Parking exclusion: Add a parking exclusion so if the landlord every turns that parking space into paid parking, you can get out of your lease