Before you sign that Healthcare Office Lease in Ontario

Modern dental office facility with sleek interior design

The choice to purchase or lease space is one of the most difficult decisions for doctors looking to establish the doors of their own clinic. Unless the doctor owns the property, they’ll need be able to sign a lease agreement to be able to operate in their preferred office space. Don’t fall for believing the landlord when he claims that this lease will be “standard” or “boilerplate” or “not subject to discussion.”

To turn the situation to your advantage, you must find an experienced lease negotiator, or a tenant representative who has prior experience working with doctors and having local connections. But be cautious because the cost of a representative for tenants is usually paid by the landlord after concluding the lease. If you’re not sure be sure to locate a reputable and reliable representative so that you don’t think twice about their motives. Lawyers may not be knowledgeable about the details needed to negotiate a fair arrangement for doctors.

If a major expansion is in the works, consult an experienced commercial contractor who can assist in determining if the space could be utilized as a private health office without any issues like plumbing or structural issues.

After the terms of business are agreed upon and the legal counsel with leasing and experience in the private sector of healthcare will be essential.

Before signing the lease the doctor and the landlord are required to draft a non-binding terms sheet or proposal letter to ensure that they agree on. Although this document is not binding the landlord may not be willing to accept concessions that are not in the proposal letter.

Typically doctors will not be able to negotiate the terms of a lease for a fresh one and will be required to take over an existing lease. However, in the event that he plans to stay at the house longer than the owner, he might be able to negotiate favorable conditions.

Be aware of the following factors Tenants be responsible for paying taxes in addition to insurance, maintenance, and charges. Sometimes, the landlord will accept an initial tax rate and the tenant has to pay for any amount that is higher than the base. When the workplace is in a condominium and the tenant is a tenant, he will be responsible for the pro-rata portion of common maintenance of the area (CAM) costs.

* A 3 to 4 percent increase in rent each year is common However, you should inquire for more information. A lender may require that the lease have a minimum term.
A 5-year or 10-year lease with a couple of possibilities to renew is sufficient.
The landlord is required to give the tenant a time frame to pay the missed rent and an unsigned report prior to ending the lease.
Sometimes landlords may allow tenants to purchase the property or the right of first refusal.
* Landlords can accept an assignment clause that allows the buyer of the future in becoming an assignee, without the landlord getting against them. They must be able to agree prior to the sale to let the assigning tenant go after the conclusion of a sale. It is essential to ensure that there is no overpayment, excluding reasonable legal costs.
* The landlord can decide not to rent an area in the vicinity to a private practice that is competing.
* If the space is required to be built out the landlord can be willing to provide an allowance for renewal or construction costs, or temporarily reduce rent.
* Ask whether the landlord is able to sublet of the premises such as to an expert.
* If the property is part of a condo, ensure that a private health office is allowed to use the building.
The office situated in the larger structure is the doctor capable of opening the office during off hours for emergency situations or during weekend? Heating and ventilation, as well as other options be in operation in these hours?
Who is responsible for the cost of air conditioning (HVAC) in the event that it has to be replaced or repaired? In most cases the tenant will be accountable for the maintenance costs, and the property owner will pay for repair costs.
* There could be an agreement which allows the landlord to make the doctor move to a different location inside the building. These clauses must be removed or softer in order to protect the doctor’s goodwill.
* Landlords can require an individual guarantee from a doctor, for example an spousal guarantee. Sometimes, the landlord can be willing to end these guarantees provided that the tenant pays all rent payments.
You might consider the possibility of requesting an automatic termination of lease in the event of the death or incapacity of the leaseholder.

The process of negotiating a lease can seem daunting, however, with the right knowledge it can be handled by utilizing a method that helps instead of limiting doctors. Contact us with any queries regarding leasing, design, or the construction of your private health office.

D.W.Inc. Design Build has an well-established reputation for being a top-quality design and build firm for healthcare facilities. The D.W.Inc. Continuum brings together a specialized medical expertise with a complete single-stop solution for architecture, design and construction in order to deliver the highest quality service to every customer we work with. For more information on the ways D.W.Inc. can bring your idea of the ideal healthcare facility and make it a reality, contact our integrated construction team now.

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