Animal Health Solutions

35 Q3 2021 | Animal Health Solutions Will you have to restore the space to its original shell? The "surrender of premises" or exit clause in your lease agreement specifies how the space must be returned to the landlord, often requiring you to restore the space back to its original shell, a costly endeavor. Check the surrender provisions in your lease to understand the agreement between you and your landlord, and ensure that you will not have to spend thousands of dollars gutting the space and restoring it when you exit. Also review the terms to ensure that upon your transition, all trade fixtures remain your property, not the landlord's. 4 Informing your landlord of your practice transition/assignment 85% of healthcare professionals have a lease with language that can prevent them from ever selling their clinic. The assignment clause may allow your landlord to interfere with your transition decision. When ready to assign the lease, you will be required to notify the landlord of the transfer to an interested buyer. Many veterinarians are horrified to learn that some assignment provisions allow the landlord to charge more rent, remove tenant-friendly language such as "exclusivity protection", deny the assignment request, or terminate the lease altogether! Why would the landlord want the right to terminate the lease? There are multiple reasons, but the main one is that it gives the landlord the option to enter into a new lease with the new buyer, with significantly increased rent and greater restrictions on the operation of the practice. Another reason is to leverage their position in order to secure proceeds from the sale of the clinic. The landlord might request a particular percentage or amount of the sale price in exchange for not terminating the lease. These situations outline why it is imperative to negotiate the office lease in your favor at renewal or startup time, before you choose an exit strategy. Get in touch with a professional veterinary office lease negotiation firm such as Cirrus Consulting Group to ensure that the assignment of lease occurs properly, and that you are protected during this critical process. The sale of your veterinary clinic/animal hospital is one of the most important financial transactions you will make in your career – there's no room for error. Therefore, it is essential to have a properly structured lease agreement in place that will protect you throughout your veterinary career and eventual clinic transition. Cirrus Consulting Group has been helping doctors in lease negotiations for over 27 years. Over the past two decades, we have reviewed over 25,000 lease agreements and helped guide thousands of healthcare practitioners through a smooth and safe practice exit. Covetrus partners with Cirrus Consulting Group to offer customers a reliable source for lease negotiations. For a complimentary consultation or lease review, contact Cirrus at 1.800.459.3413 or info@cirrusconsultinggroup.com. About the author Eric Pook is the President of Cirrus Consulting Group, North America's preeminent commercial real estate and office lease negotiation firm for dentists. Eric has been consulting small businesses since the late 90's with an emphasis on revenue creation and cost mitigation. Eric advises doctors each day on how to successfully leverage the veterinary office lease agreement to maximize practice value while reducing risk and liability. You can contact Cirrus at 1.800.459.3413 or www.cirrusconsultinggroup.com.

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