NNN leasing contracts represent the greatest challenge and bargaining opportunity for rental dentists. A dentist with an experienced professional relationship on an NNN lease agreement can negotiate caps for the annual amount that NNN leasing costs may increase, exclusions for certain joint expenses that are passed on to the tenant under the name of maintenance overhead (sometimes called CAM) and find other ways of reallocating to the lessor. Another common bargaining room in the NNN tenancy of a dental practice is to ensure that the dentist on lease is not required to bear related and specific costs to other tenants of the landlord in the building that the lessor might want to pass on to the rental landlord as part of the landlord`s NNN fee. As buying buildings is expensive, with some debts that come with commercial real estate ownership, you will probably be advised to acquire the property as a separate business from your dental practice. In other words, it is not the practice that buys the building, so there will be two separate companies: the rental company and the tenant company. Their office lease defines the relationship between these two companies, defines their obligations and carefully separates them for various legal and accounting reasons. Just as the lease is important to you and your dental practice as a tenant, the agreement is essential for you and your practice if you own the building. The lease can be a valuable asset or a disadvantage for your property and your practice. Here are some important things to consider when checking the conditions of a dental lease. Most leases provide that construction is considered complete when the lessor or contractor/architect certifies that the construction is „essentially completed.“ Generally, this means that the „Punch List“ items are filled out by the contractor after the practice is open to the activity, and this is certainly not the image that a dentist wants to present to his patients.
And if I told you that your neighbor`s office rental may actually have lower prices, but also limit their ability to sell the practice. In addition, the rental contract contains a language that allows the lessor up to 50% of the proceeds from the sale of the practice. What if I told you that your lease contains the same big traps? Is it still about rent? A dentist chooses to create his own dental practice, either by purchasing an existing practice or from scratch. It ends negotiations on the rent of the new practice, which includes free rent, extension options, tenant allowances. He`s excited and looking forward to signing the lease. Upgrades are commonly referred to as „tenant improvements“ and can be negotiated and commemorated in different ways in the lease. A lump sum that the landlord spends to help with the extension, renovation or improvement of the square is the most common. The trick of each negotiation is to negotiate not only how much, but how they are paid. Most dental practice adjustments take several months. As a general rule, landlords only want to reimburse tenant improvements when the landlord can guarantee that the work has been done properly and coded. A dentist in a start-up context should consider negotiating to accelerate the repayment for tenants of improvements, either because the costs are incurred or in increments, so that the leasing surgeon may have improved cash flow during the development phase. It is very important to ensure that these complex and dental construction conditions are properly formulated in the lease.
The tenancy agreement is clear and gives the tenant five renewal opportunities for fair market rents for the premises.