When it comes to buying a dental practice, there are a number of important steps you need to take to ensure that you investment is safe and sustainable. As such, here are a few of the most important considerations for you, as the purchaser:
Finding out as much as you can about your new practice is absolutely essential. This way, you can identify any potential problems and decide how best to deal with them in advance – before you have any legal commitment to the purchase. Legal Due diligence is normally a lengthy process carried out by a purchaser’s lawyers and is typically split into two different sections: property due diligence and dental due diligence.
So far as the property is concerned, in addition to the legal due diligence it is crucial to employ a surveyor to check whether the property is structurally sound. Then, a number of searches (questionnaires sent to various statutory authorities such as the local authority and environment agency) will be undertaken, again, by the lawyers.
Your lawyers should also check whether there are any restrictive covenants in place on the premises, to ensure you are fully permitted to practise there.
If, however, you are buying a property that has not been used as a dental practice previously, restrictive covenants are far more likely to be a factor. You must be diligent and investigate any prohibitions that are in force on the premises before you take the process further. It is possible to release restrictive covenants in some cases, or to make variations that will allow you to conduct your dental business in a beneficial manner. If this is not possible, it is worth reconsidering the acquisition – since if you proceed and break the covenant in the future, you will likely face an injunction or fine.
If premises have not been used before as a dental practice it will also be necessary to apply for planning permission to use the premises as a dental practice – and in fact, even where the premises are being used as a practice, it is not that uncommon to find that planning permission was never obtained and whilst this rarely results in a purchase falling through, it is an issue which needs to be addressed.
You will also need to arrange dental-specific due diligence, to determine the state of the business you are purchasing – from the practice’s goodwill, to the number of employees and associates on the books, and whether they have thorough agreements in place.
In essence, your due diligence checks will tell you whether the investment you are making is worthwhile and sustainable for the future.
Finance for your venture must, of course, be approved beforehand – and it is important to allocate enough time for this. Some banks can be particularly pedantic about conducting their own checks and valuations and this can delay proceedings for some time. Be sure to secure this funding in a timely manner and provide your bank with all necessary information promptly. It is also the case that your lawyers will require what is known as “safe to lend” confirmation from the bank – in other words, that the mortgage advance will be available when requested, before being legally committed to the purchase.
A legal requirement for any dental practitioner, it is absolutely vital for you to make your CQC application on time. This will most likely involve getting a DBS check – which must be made through the CQC itself.
It is also important to begin your CQC application at the right time. If you start the application too early, it will simply be rejected; if it is made too late, you will not be able to complete on time. The window of opportunity is very specific and there are many reasons why an application could be rejected, so it is important to seek advice. It is important to bear in mind that the whole process, from applying for a DBS check to approval from CQC will take around 14 weeks – and in some cases can take considerably longer.
You must be prepared to accept that purchasing a dental practice takes time and, thus, you should have realistic expectations. There will in many cases be unforeseen delays. A great deal of the purchasing process is down to the seller and how quickly they can arrange the information you need. In terms of due diligence, which is a particularly comprehensive element, you will often see delays of weeks, even months. It is important not to let this dishearten you or dissuade you from continuing your ambition to run your own practice. You simply need to be realistic and patient.
It is also vital that you employ the services of a dental specific solicitor, who can help you work through the many different processes involved with buying a dental practice. The team at Goodman Grant Solicitors are a good example; with years of experience in the field, they have the expertise and the know-how to offer consistent support and unrivalled advice.
Buying a dental practice, whether it’s the first one or not, is an exciting but challenging experience. To ensure that it is everything you hope it to be, ensure you get the best possible support. For more information, read our blog post on Ten Reasons Why You Need Specialist Legal Advice When Buying a Dental Practice