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Top 7 Key Issues When Leasing A Medical Office

Commercial Space Toronto Blog

Top 7 Key Issues When Leasing A Medical Office

Granted, medical practitioners and offices in general do not relocate to a new premise as often as their general office counterparts. Nevertheless, as the number of private practices is increasing and the competition for new patients is getting steeper, most medical care providers find themselves in the situation of looking for a new facility, one that can cater to all the needs of their old and new patients. This trend is particularly prevalent in the small suburban areas, while the top seekers looking for new premises include urgent care clinics and small medical offices. This can only mean good news for landlords with commercial spaces for rent, especially since in this niche the leases come with longer terms compared to general office companies. In fact, statistics suggest that while general office practices rent a building for 3 to 5 years, medical practitioners lease it for 7 to 10 years. Still, considering the nature of health care, practitioner can’t simply opt for the first building they find. Let’s explore some of the issues to account for when renting space for your urgent care clinic or medical office.

1. Hazardous materials and waste

Whether you’re opening up a medical lab, a clinic or an ordinary treatment office, take note that you will be working with hazardous materials that generate biomedical waste. Furthermore, if you count a CT scanner, X-ray machine or other similar equipment, then you are also creating harmful radiation. Therefore, the space you want for your practice needs to account for these special prerequisites; the importance of having them clearly stipulated in the contract cannot be stressed enough.

2. Compliance with the law

8aca89ed84357a17fda4a9ad_640 Because your clinic or office will be dealing with patients daily, you need to make sure that the building is in compliance with the federal and local laws. In other words, you need to pay special attention to whether the facility meets the strict criteria stipulated in the disability act of Canada. Therefore, look over the contract and determine if the building has undergone any sort of scrutiny in this sense, or else you risk fines and potential penalties.

3. Utilities and after-hours access

Even if you don’t intend to operate on a 24-hour basis, chances are that you will receive patients after normal hours, especially if it’s an emergency. Because tending to these cases doesn’t require the entire building to be fully operational, you should inquire about how the utilities will be handled during off-hours. While it might seem irrelevant, trust us, this will save you a great deal of cash in the long-run.

4. Exclusivity provisions

The exclusive use provision is a common clause in the leasing contract that forbids landlords from renting spaces in the building to other tenants who are in direct competition with you. Given the steep competition for new patients for private medical practices nowadays, it would be wise to get exclusivity for your specific specialty practice.

5. Death and disability clauses

If you’re opening a small urgent care clinic and you intend to practice solo, then it might prove useful to get a death and disability clause in the contract. The idea behind this clause is that you can cancel the lease – you will be of course eligible for the penalties stipulated in the contract – in the event the physician is unable to practice due to disability or death. While it’s true that most landlords will argue that you have insurance for this purpose, having this provision into the lease can spare you a lot of headaches in case of such an unfortunate occurrence.

6. Inspections and privacy

Most contracts allow the landlord to re-enter your premises for the purpose of showing future tenants the space or perform the regular inspections associated with compliance criteria mandated by law. Considering that you will be working with patients that require special care and attention, you will need to establish how often the landlord is permitted to show up on the premises. Ideally, you should make sure to include a clause that limits the landlord’s access to patient rooms, the areas where you keep the records and other parts of the building during certain hours.

7. Improvement provisions

More often than not, the costs associated with the necessities of medical practices often exceed the ones of the average office user. From adding extensive plumbing and millwork to ensuring the compliance of the equipment and structural elements, there are numerous things that add up to the extra rent fees. Take note that it’s not uncommon to see situations when physician practices finance lease improvement costs beyond the landlord’s allowance; this is in addition to the costs associated with the investment made in medical equipment. As a consequence, make sure the contract clearly specifies your lien rights. Moreover, because the lease constitutes a multi-year financial investment, it would be wise to consult a real estate advisor before shopping around for a commercial space.

Posted 2017-09-15T20:47:21+00:00 Sep 15 2017 By inBlogwith0 Comments