Protecting Your Practice: Office Relocation

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Protecting Your Practice: Office Relocation

Consider this scenario:
You have an established and successful dental office with a substantial patient base drawn from the area that you’ve cultivated over the years. You also have a substantial investment in customized office space that you built out. One day, you receive a notice from your landlord that you must relocate your office to a different location, perhaps elsewhere in the building or maybe in another building entirely or another part of the shopping center or the mall.

Notice anything troubling?
Who will pay for the new construction costs? Where will your patients go during the time you have to spend relocating? Will the landlord cover your lost profits as a result of a move if they don’t have to?

How did this happen?
Form commercial leases will often include a relocation clause that gives landlords the ability to relocate a tenant to another space in the building, shopping center, or mall, as the case may be. While such a provision may be inconvenient but not fatal to a law or accounting office, the costs and economic losses associated with such a relocation could be enough to force you to close your dental practice.

Thankfully, you’re considering these issues now, before signing a dental office lease, and can prepare accordingly. This is a subject that we highly recommend be addressed at the letter of intent/lease proposal stage. Your landlord should under no circumstances have the unfettered ability to force you to move, given the high costs involved in fitting out a new dental office. If your future landlord absolutely insists on having the right to relocate your office, you can employ negotiation strategies to make exercising that right as unattractive as possible.

Planning now will save you later. Make sure you don’t miss out.

Categories: Letters of Intent, Office Leases, Real Estate