By: Joseph Clark, Esq.

For doctors considering a location for their practice, it’s important to watch out for landlords who try to treat your practice as if it’s just another corner store. Many landlords use standardized lease forms which are designed to apply to business needs in general and don’t take into account the specific needs of a medical practice.  As a result, if doctors aren’t careful, they could sign leases that will make the operation of their medical practice a constant battle. 

Many lease agreements undermine medical practices by requiring landlord consent in areas where there shouldn’t need to be.  For instance, a common feature of standardized lease agreements is the requirement that the tenant obtain approval from the landlord before erecting any exterior signs on the premises.  But in New York, doctors are required by law to have certain signage maintained at their practice. While most landlords are unlikely to withhold consent to the signs, the fact remains that a doctor’s lease should not be treated like a candy store owner’s; provisions like these should be removed from the lease. 

Another stumbling block is the onerous maintenance and repair provisions that landlords so often include in lease agreements.  These provisions typically require the tenant to repair the air conditioning and ventilation systems of the premises and in some cases, more drastically, repair the roof.  For the average blue-collar business owner, this maintenance may be par for the course; but for a pediatrician, say, whose main obligation is care for her patients, this kind of hefty workmanship is unreasonable and should be the landlord’s responsibility. Even more problematic is maintenance that can’t easily be hired for.   Imagine signing a lease which requires the tenant to clean the sidewalks and remove any obstruction on them, or keep the garbage off the premises except immediately before pick-up: who should the doctor call to address these obligations?  This kind of question should be one left to the landlord, not the doctor. 

Another lease agreement feature that doctors should be wary of is the kind of insurance the landlord requires the tenant to obtain.   For storefront properties, lease agreements often require the tenant to obtain plate glass insurance because the landlord anticipates that the windows might be broken.  But a doctor does not run a candy store with neighborhood kids bustling about. The likelihood that a patient would break the windows while visiting their doctor is remote. As a result, no doctor should need to insure the plate glass.

Above all, doctors must make sure that they can actually practice medicine freely on the premises.  Landlords unaccustomed to leasing to doctors may not know that the premises must be zoned for medical use before the space is leased by a medical practice; it is incumbent upon doctors to check to make sure the space is properly zoned.  Leases may also contain vague “permitted use” provisions. For example, the lease might say that the only permitted use for the tenancy is “dermatology.” But a landlord might not realize what a dermatological practice actually entails.  Would he envision surgical tables, gas tanks, and other similar equipment? These essentials of the practice must be made clear to the landlord and their use explicitly permitted in the lease itself.  Finally, doctors need to make sure that the assignment/subletting provisions of their lease don’t prevent the practice from adding on another doctor, who for example, might need to carve out additional office space within the practice. It’s important that the lease agreement does not restrict the needs of the practice in responding to changes in patient volume. 

All of these considerations (and more!) are essential to ensuring the smooth operation of a medical practice.  A lease agreement should not undermine a medical practice’s compliance with the law. Nor should it prevent doctors from addressing patient needs by restricting the kinds of equipment and supplies maintained on the premises.   The lease should not impose unreasonable maintenance obligations on the practice either. By focusing in on these kinds of trouble-making provisions, doctors can ensure that their practice will operate on their terms. 

 

For assistance with a medical practice real estate lease or purchase, contact Joseph Clark, Esq. at  (516) 747-6700 x. 307 or email him at JClark@Kirschenbaumesq.com or Jennifer Kirschenbaum, Esq. at (516) 747-6700 x. 302 or email her at Jennifer@Kirschenbaumesq.com.