Most dental professionals, at some point in their career, seek out commercial lease space in which to place their dental practice. The space may be in a "strip center," a stand-alone building, or an office building. Once you have decided on an office location and the type of building or commercial space from which to operate your dental practice, there are many further issues to overcome in entering into the actual written agreement to lease space from the management company or other type of landlord which manages the property in question.

In my law practice, I have had an opportunity to review and sometimes assist dental practitioners in the negotiation of specific terms of various leases for commercial space. Commercial leases come in different shapes and sizes. Some are short and sweet on regular-sized paper, while others are thick and lengthy on legal-sized paper, and many are somewhere in between. They all have some common factors, though, the foremost of which is that they all are dripping with verbose "legalese," with every provision written in very small print, of course.

Generally, dentists who are leasing space for their first dental office tend to enter into these agreements without counsel, negotiation, or discussion with the landlord regarding the lease terms, only to find later that they have agreed to terms which are not in their favor on an issue which has suddenly become very important, i.e., common area maintenance expenses, or repair of the air conditioning unit, or premises liability, etc. Although one may feel that the lease is a "take it or leave it" deal, especially when the lease is pre-printed and delivered by the landlord as a standard form, most times the opposite is true, and dentists as potential tenants of commercial space should take advantage of the opportunity to negotiate favorable lease terms.

The following summarizes some of my observations and recommendations as to what dentists should negotiate for in addition to the common provisions in a standard commercial lease.

Parties: Make sure the lease agreement accurately states and correctly spells your name and the name of your dental practice. If you are a professional corporation, the landlord will probably require a personal guarantee, which is a separate document containing additional terms to be reviewed and possibly negotiated.

Rent: This provision needs to accurately state the financial terms for consideration by each party, particularly the amount of rent and the frequency it is to be paid needs. Also, this provision should specifically state to whom and the place or address at which the rent is payable.

Common Areas: This provision typically sets out the boundries which are common to all of the tenants of the landlord, and is commonly found in a strip center lease. This would be a good place to insert a provision to reserve a fixed number of parking spaces for the exclusive use of dental office patients. For example: "Tenant shall be permitted upon written consent of Landlord to erect or place signs for the purpose of reserving for the exclusive use of his dental practice clientele, patients, and/or visitors _____ parking places on the east end of the leased premises, with each sign to read "This parking space is reserved for the exclusive use of visitors and patients of the dental office of Dr. Super Dentist. All others will be towed at violators expense." Landlord's consent to such parking space reservations shall not be unreasonably withheld."

Use and Care of Premises: This provision sets forth specifically for what purpose the tenant may use the leased premises. As most if not all commercial leases are forms used for all types of business tenants, the practice of dentistry is rarely an itemized use. Make sure that you have entered the phrase "the Practice of Dentistry, a dental laboratory, and other directly related activities" into this provision.

Maintenance: Whatever you want done as far as repair and maintenance of the leased premises by the Landlord before moving in, make sure you get it in writing on the lease agreement. Ideally, negotiate to have the lease state that the repair or maintenance work is to be completed by the landlord before or by the move in date, otherwise the Landlord is considered to be in default of the lease, and the lease then becomes void with no obligation on your part, and that the deposit, if any has been made, is refundable to Tenant immediately. Include a laundry list of all of the items Landlord is responsible for repairing, including lightbulb replacement, plumbing, electricity, ceiling panels, carpet, pre-existing fixtures, air conditioning and heating systems (except the replacement of filters) etc., in addition to the foundation, exterior walls, and foundation.

Alterations and Fixtures: Dental equipment is only useful to a dentist, and most dentists take their equipment with them when they move from space to space. All types of dental equipment, be it for operatory or laboratory, are unattached removable trade fixtures. Therefore, there needs to be some definition of "unattached, removable trade fixtures" in the lease agreement, as opposed to structural alterations, additions, or improvements which may remain under the lease terms as property of the landlord. Make sure an exhibit is attached to the lease agreement which lists all of the equipment to be installed or affixed to the leased premises, and a provision that states that Tenant may add any other dental equipment as Tenant sees fit to add for the purposes of the practice of dentistry.

Signage: Signage is marketing, and marketing is business, therefore signage is very important. Issues will include who will pay for the signage erection and maintenance. at a minimum, the following additional language or consent form should be included in the lease allowing the following: "Landlord hereby consents that Tenant shall be permitted to erect, install, and/or place appropriate business signage, which conforms to the Landlord's architectural plan, upon the roof directly above the leased premises and on the pylon sign structure in the common area, which indicates the business purpose, name(s), and/or entity of the Tenant (i.e., "Dr. Super Dentist, Family and Cosmetic Dentistry").

Assignment/Subletting: Sometimes, dentists like to sublet to other dentists or other dental specialists. An additional provision, if necessary, would read as follows: "Landlord hereby gives consent to Tenant's subletting of said premises, provided that Tenant and any guarantor of Tenant's obligations under this lease shall at all times remain fully responsible and liable for the payment of the rent herein specified and for compliance with all other obligations under this lease. All rent received by Tenant from an assignee or sublessee shall be in trust for the Landlord, and may be made directly to Landlord upon Landlord's election and reasonable notice."

Exclusivity: Dentist sometimes prefer to be the only dentist around. An exclusivity clause would then be a negotiable item, and may read as follows: "Landlord hereby guarantees that Tenant shall be the sole dental practitioner and operator/owner of the sole dental office/practice within the entire site located at (address), the location within which Tenant's leased premises are located, for the duration of this lease term and the optional extended term should Tenant elect such option. Should any other dental practice or practitioner become a Tenant of Landlord within said premises, then Landlord shall be in default of this lease and liable to the Tenant under this lease for any and all damages caused Tenant as a result thereof, and Tenant shall then have the option to terminate this lease without further obligation to Landlord, rent payments or otherwise."

Dentist Disability: Termination of the lease agreement will be set forth in specific detail, and will focus primarily on events of default, which of course includes non-payment of rent. A key issue for dentists is that disability, should it occur, will limit the dentist's ability to pay rent. Therefore, it is recommended that the following clause be added to the agreement as follows: "Should Tenant become physically disabled in any way such that he is unable to carry on in his business and livelihood as a dental practitioner, and notwithstanding Tenant's option to sell his business/dental practice and assign or sublease the leased premises upon Landlord's consent, this lease shall terminate without requirement of notice, and Tenant shall not be obligated for any additional rents beyond the month of termination and time necessary to vacate the premises. Should Tenant choose to assign or sublease, such assignment and sublease shall be according to the relevant provisions herein under."

This is only a summarization of a few of the common lease terms for commercial space, and some recommendations which will help in the negotiation of lease terms which will be favorable to your dental practice. You are encouraged to discuss your commercial leases, or any other legal matter, with an attorney of your choice.

Boyd W. Shepherd is licensed to practice law and dentistry in the state of Texas, and is a member of the GHDS, TDA, and ADA.