Are you taking a lease?

Laura Frensham, solicitor at Goodman Grant Solicitors, discusses some of the potential pitfalls when taking out a lease for a dental practice…

When acquiring a dental practice, there are many different elements that must be carefully considered. One of these is whether or not you will be purchasing a freehold property or a leasehold.

Many practitioners may prefer to opt for a leasehold, since it will often represent a more affordable investment – but this by no means make the process any less complicated. Indeed, there are a great many considerations when taking on a lease that must be taken into account.

It is vital to know precisely what you are getting into with your lease and whether it meets your business’s specific needs. It goes without saying that you must be absolutely sure that the parameters of the lease allow for the practise of dentistry and this must be checked by your legal advisor.

You must also be completely sure of the condition of the building itself. This is particularly important but can easily be overlooked; many people might assume that it would not be necessary to conduct a thorough structural building survey on the property they are intending to lease, on the basis that they do not own the fabric of the property and, therefore (wrongly), assume it won’t actually be their responsibility.

Unfortunately, this is a common misconception – and can often to lead to a nastily expensive surprise in the future. Indeed, while it is often the case that the landlord will be required to carry out any necessary repairs to the building and to maintain the structural or exterior parts of the property on a day-to-day basis, they will almost always recover the cost of this from their tenants.

This could be a significant financial burden; if the property needed substantial remedial work done, for example, to the roof, the cost would fall entirely on the tenant. For a dental practitioner who has taken out a short-term lease and potentially intends to move on or expand into a new property at a later date, this can be particularly frustrating, since the benefits of the repair will ultimately be enjoyed by the landlord and the next tenants rather than themselves.

Many people do not truly comprehend or appreciate the significance of particular clauses in their leases, though this is understandable given that the necessary documentation can be complex and lengthy, with a great deal of technical detail. As such, many tenants will never fully realise the minutiae of their lease agreement until an issue arises and they are informed by their landlord via an unwelcome invoice.

As such, it is important to read the lease agreement fully in conjunction with a detailed but clear and comprehensive lease report from your property solicitor, and ensure that you are aware of your obligations in regards to the repair and maintenance of the property. This is vital no matter how short the lease may be. If the stipulated obligations are too onerous given the state of the property, it may be better to consider a different property altogether, to avoid having to pay substantial sums further down the line. After all, any money you are required to invest into repairs will not be truly benefitting you – rather improving the quality of the landlord’s assets. Alternatively, your property lawyer can potentially seek to negotiate with the landlord’s solicitor limiting your repair and maintenance obligations in the lease to such a position which is acceptable and fair to both parties. 

It’s also a prudent idea to conduct a full structural survey at the earliest possible point, to ascertain the actual condition of the building and whether or not you will be likely to encounter any significant problems in the future.

Of course, it is also crucial that you seek out specialist legal advice, just as you would if you were buying a freehold property. This way, you may be able to negotiate a new lease that is more satisfactory to you and your business needs, without imposing any overly onerous or potentially expensive obligations on you.

The team at Goodman Grant are experienced with all property issues and have a profound understanding of the dental profession, giving them a unique insight into the needs and considerations when purchasing a leasehold practice. They will be able to advise you throughout the process and discuss with you any matters that may be of concern.

For further information contact Laura at [email protected]


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