Protect Your Office Occupancy Rights by George Vaill

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Dentaltown Magazine

By following lease terms—including renewals—to the letter, you’ll ensure the stability and safety of your practice


by George Vaill


Your office lease is one of the most important contracts that you’ll ever sign in your business life. That’s not hyperbole—that’s reality. And when the landlord signed your lease, he granted you exclusive, guaranteed, legal control over that office space for the length of the term, including renewal option periods, enabling you to use that real estate for your business purposes under terms and conditions that cannot be changed or taken away as long as you play by the rules.

That guaranteed control—that stability—is the essence of what a lease arrangement is all about, and is what allows you to pursue your business objectives without interruption for those stated periods of time. Without that control, you may be out of business! That’s why it is so important to protect that control by fulfilling all of your lease obligations exactly in the manner stated in your lease.

A cautionary tale

Having the right to renew or extend your lease beyond the initial lease term—thereby guaranteeing continued control of your office space—is a critical component of your business, and to protect your occupancy rights, it’s very important that you pay strict attention to the lease and to the calendar. Ordinarily, to exercise your renewal right, you must send written notice to the landlord declaring your intention to renew the lease exactly in the manner specified in the “Notices” section of the lease within the stated time frame. Provided that you’ve fulfilled all of your lease obligations and have given proper written notice, the landlord is obligated to allow you to continue your occupancy under the renewal terms spelled out in the lease.

Failing to give the landlord proper written notice of your election to continue your occupancy exactly in the manner set forth in the lease is a disaster in waiting. This is where “Dr. John” in Florida missed the boat. Here’s his story.

One Wednesday, after making his way through the usual end-of-day paperwork shuffle at the office, Dr.?John was daydreaming about the long weekend sailing trip he had planned. He had worked his heart out for 10 years building his practice, and was pleased with finally having arrived at a time when he could afford to do nice things with his family. He felt that he’d done everything right and, now that his business was humming along nicely, he was proud of what he had accomplished and confident in his future. Life was his oyster! He saw nothing but clear sailing ahead.

He was lost in that reverie when his train of thought was interrupted by a postal carrier who walked in and announced that he had a certified letter for which John needed to sign. John had received certified letters before and was always leery of what they might portend, so he had some trepidation as he tore open the envelope. His fear was justified: The letter from his landlord informed John that, because he hadn’t given the landlord written notice of his election to renew his lease some months earlier, as and when required under his lease, he was being kicked out of his space and would have to vacate his office at the end of the month to make way for a new tenant.

You snooze, you lose … your office

John was startled, confused, angry and terrified! He had made an egregious error: He had lost track of his renewal option timing and now not only was he being evicted from the space and location that he had built out and branded at great expense, but he was also at risk of losing all of his patients—his business!—if he didn’t have a place within which to practice dentistry.

The rest of the story is not pleasant. John begged and pleaded with his landlord to let him stay, but the landlord had already signed a lease with a new tenant. John hired an attorney to fight for him, to no avail, and as it became evident that he was fighting a losing battle, he scrambled to find a new office space. After several weeks of frantic searching, he finally found a sad building a half-hour away with no visibility, inadequate parking and a too-small space that needed total, very costly renovations. With no alternative in sight and desperate not to lose his patient base, John reluctantly signed a new lease for a space for which he knew he would someday regret settling.

He ended up losing a large number of patients because he had no place to work for nearly four months and had moved quite far away from many of them. He spent a major portion of his retirement funds building out the new space and the next 10 years trying to recover from this disastrous turn of events. Sadly, this lapse, this failure to know and understand and protect his occupancy rights, continues to haunt his financial world to this day. Needless to say, sailing vacations are no longer anywhere on his horizon.

Keep your eye on the prize—your lease

Unfortunately, far too often, I see this scenario unfold among dentists who sign a lease and then forget about it. They don’t realize that the lease memorializes the rights and obligations to which they and the landlord mutually agreed, and that the terms and provisions in that document are not mere suggestions, as too many believe at their peril; rather, they are contractual requirements that strictly govern the occupancy with very serious legal and business consequences for those who carelessly choose to treat the lease as just a casual arrangement. And as John’s unfortunate experience illustrates, not paying attention to the lease requirements may put all of your life’s hard work in jeopardy. Could all of this have been prevented? Absolutely. If John had paid better—any—attention to his lease, he would not have let his occupancy rights, his retirement funds and his lifelong dreams slip away.

All the benefits of having a successful marketing program, a loyal and dedicated staff, current knowledge about your craft and state-of-the-art equipment mean nothing if you put your occupancy rights in jeopardy by failing to fulfill your obligations or assert your contractual rights as and when specified in your lease. So take a lesson from John, and don’t put your hard-earned business in jeopardy. Instead, know and understand your lease and treat it with the respect that it deserves to protect your office occupancy rights.

Your To-Do List

Here are 10 things you should do to protect your office occupancy rights:

1. Keep a complete copy of your lease in your office, along with another copy in a safe location elsewhere. Include every page—every rider, amendment, exhibit and addendum.

2. Make sure that your copy of the lease has been signed and dated by all parties.

3. Read through your lease once in a while, to refresh yourself as to your rights and obligations and to those of the landlord.

4. Enter all critical lease dates in your electronic calendar to remind you of specified actions that must be taken by you or the landlord.

5. Follow the lease to the letter, just as you will want to hold the landlord to the same standard of performance.

6. Document and submit all complaints about the property and/or the landlord’s performance (or nonperformance) in writing, with dates, times, places, witnesses and all relevant evidence to support your complaint.

7. Don’t assume anything, and don’t ever rely upon verbal assertions by the landlord or its agents. If it’s not in the lease, it’s not so.

8. Start planning at least 12 months in advance for renewals and renegotiations, to preserve sufficient time to invoke Plan B if Plan A doesn’t pan out.

9. Don’t approach the landlord to discuss anything to be negotiated without first developing a clear set of goals for that negotiation and a strategy for prosecuting that negotiation.

10. Put your ego aside and seek professional advice with respect to areas about which you have little or no knowledge.

Check it out!

Learn even more in a Dentistry Uncensored podcast
In his podcast with Dentaltown founder Dr. Howard Farran, lease negotiations specialist George Vaill discusses what dentists need to know about dental office lease negotiations—including whom to involve and when, how to set a long-term plan, and when it’s a good idea to involve an attorney. To stream or watch the podcast, go to dentaltown.com/vaill-lease.

Author Bio
Author George Vaill has been negotiating the business terms of office leases for dentists nationwide for more than 27 years.
 
 

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