The landlord presents you with a lease which appears to be a standard lease. Since "every other" tenant has signed the "same" lease, the landlord asks you to sign the lease, should you?

No. Not without consulting an attorney.

LEASE COMMENCEMENT DATE

Once your lease is signed, you and the landlord have opposite goals. The landlord wants the lease to start as soon as possible so that you can begin paying rent immediately.

If your landlord is building out your office space, it is extremely important that you give the landlord the most detailed plans that you can, specifying: carpet type; type of cabinetry; location of bathrooms, sinks, laboratory, built in desks, and reception area; and other details in an effort to guarantee that your dental office will meet your needs and expectations.

Most lease agreements provide that the build out will be deemed complete when the landlord or its contractor/architect certify that the build out has been "substantially completed". Usually this means that "punch list" items will be completed by the contractor after you are open for business, and this certainly is not the image that you want to present to your patients.

If you are building out the space, you should select the most qualified contractor you can and negotiate an appropriate build out period. You may also want to insert a liquidated damages clause in the construction contract, which states that if construction delays put you behind schedule, the contractor will pay your rent (rather than you) until the office is completed.

RENT INCREASES

Nearly all leases have rent escalation clauses. Escalation clauses may either be specifically outlined in the lease so that you know the exact amount of rent you will be paying or the escalation clause may be tied to an index, usually the Consumer Price Index ("C.P.I."). The best practice is to set an exact amount which will be paid over the term of the lease. This way there are no surprises. Indexes are too unpredictable and can hinder the cash flow of a practice.

When negotiating your lease, you should always include an option to renew your lease, which will specify the exact amount of rent you will pay during the option period. If you are using a "standard lease", you will usually find one of two methods which will be used in order to determine the amount of rent you will pay during the option period: (1) an increase tied to the C.P.I.; or (ii) the prevailing market rent in the area.

The term of the option period should be specifically stated (usually 5 to 10 years), and the rent for each option year should be specified.

What happens if your office building is damaged by fire, and you are forced to cease practicing for four (4) to six (6) months.

Most leases impose no real obligation on the landlord to rebuild. Unfortunately, most contracts give the landlord the greatest flexibility in determining when or if to rebuild. By contrast, the tenant is typically obligated to move back into the space within a short period of time after the building is repaired. Imagine the difficulty in retaining loyal patients when you move into interim office space only to be forced to move back to the old space. Therefore, every lease should include a provision where a tenant shall have the right to terminate the lease if the landlord has not commenced restoration or has not completed the work within a reasonable period of time [the term "reasonable period" should be specified].

Ideally, I would recommend that the damage section of the lease contain at least the following requirements: that the landlord carry full replacement cost insurance; that the landlord commence repairs within 60 days and complete the repairs within 120 days, and if not, the tenant may terminate the lease. In addition, a tenant should always carry full replacement cost insurance coverage.

The landlord always has the option to grant or deny an assignment of an existing lease. Imagine if you enter into a contract to sell your practice, and your landlord will not assign your lease to the Purchaser. All purchase and sale agreement should contain a clause that the sale is contingent upon the landlord assigning your lease to the Purchaser.

The growing trend in the rental market is to still hold the Seller liable for the terms of the lease [i.e., rent], even though the Purchaser is occupying the Seller’s space, after the sale of the practice has taken place.

I would strongly suggest that you try to incorporate the following language into each assignment clause: that the landlord cannot unreasonably withhold its consent to the assignment; that the landlord must consent if the buyer has substantially the same net worth and credit history as the seller at the time of signing the lease; that the landlord cannot deny an assignment based on tenant mix or tenant exclusives if the assignee is a dentist; that the selling dentist be released from liability at the expiration of the existing term; that the landlord have no right to adjust the rent to market price based upon an assignment; and that the landlord has no right to claim a part of the sale proceeds upon the sale of the business.

What happens to the lease if a dentist dies or becomes disabled? Generally, no standard lease will permit the dentist or his/her estate from being released of liability. The dentist or his/her estate must still pay rent. Therefore, you should always attempt to negotiate a release or termination of the lease, if the tenant (dentist) dies or becomes disabled.

Many leases contain relocation clauses whereby the landlord may move a tenant to another location within the building. As a result, special care must be given so that your dental practice is not moved in to a smaller space within the building.

Nearly all leases protect the landlord from liability for their action or inaction. At a minimum, the landlord should be liable for their own actions, such as when they fail to properly maintain the building, which in turn causes water damage to your office space.

A prospective tenant should always remember that the lease has been drafted by the landlord or their attorney. The prospective tenant should use a qualified attorney to review the lease and make necessary changes. Otherwise, you will end up with a one-sided lease, which will solely benefit the landlord.