If you sell to a corporate dental group what will happen to your building?

Unfortunately there isn’t one simple answer to this question. A lot will depend on how you occupy the building at present, if you have a lease the buyer may want to take this over, or they may want to renegotiate new terms with your landlord. If you own the freehold then the buyer may be interested in purchasing this, or in other circumstances they may be looking to take a lease from you, meaning you become their landlord.

 
If you own your freehold and are able to negotiate a situation whereby the corporate buyer leases the property from you this can provide a valuable income for your retirement. A lot will depend on your specific requirements and the way in which your deal is negotiated; but there are often many options you can consider.

  
One major advantage in granting a lease to a corporate dental group is that your tenant is likely to be of a sound financial standing. In a dwindling commercial letting market this is not something to be sniffed at. Dental Corporates will have money and they are unlikely to default on rent or fail to comply with their tenant obligations. They do things by the book and are experienced in complying with leases – not wanting to put their occupation of a property at risk. They will also be keen to ensure that the practice is maintained in a good condition for the continued benefit of the business.

 
On the other hand they will aim to ensure that the lease you enter into is watertight from their perspective. Indeed you might find that the terms of the lease are more strongly weighted in the tenant’s favour than you would otherwise expect. For instance they will be looking to limit factors such as their obligation toward repairing damages as far as is practical in the circumstances. Also, recently, there is a new provision being introduced into such leases in which, as the landlord, you are not entitled to inspect the property without first being accompanied by a representative of the tenant. Whilst you can see the reasoning behind this – it ensures patient confidentiality and data protection compliance etc. – it is now something that corporate buyers will often insist upon and that you would not usually agree to if your tenant were an individual.

  
Once your deal has been negotiated and the solicitors instructed, you might find that from a property perspective things begin to proceed in a considerably more regimented fashion than had you been selling to an individual.  A corporate buyer will typically want to see copies of all documents relating to a property, asbestos risk assessments and electrical installation certificates to mention just a couple. The corporate buyer will want to ensure that all of the practices within their portfolio meet statutory requirements and one way they can ensure this is through thoroughly checking everything is completed and is up-to-date before they buy.

 
Another difference is that a corporate buyer will often use their own standard format of enquiries. Unlike most dental lawyers who will use the commercial property standard enquiries to obtain all the necessary information relating to a property, when selling to a corporate you may find that they have their own enquiries that are specifically adapted to their needs. The good news is that the enquiries raised by a corporate buyer are often slightly shorter and usually in a language that is easier to understand (if only slightly).

 
The final major difference in selling to a corporate dental buyer in comparison to an individual is the timescale involved. Corporate buyers will have buying quotas to meet and they may want to purchase your practice before a certain date. If your solicitor is experienced in the process of selling to a corporate buyer you may find that documents can be agreed very quickly – an experienced lawyer will know how to achieve the best deal for you in the shortest timescale, and will know which points are worth pursuing and which are going to be a pointless battle.

  
When selling to a corporate buyer you may feel like a small fish in their big pond. However, this needn’t be the reality. Ensuring that your legal team is familiar with dental practices is essential, but choosing a lawyer familiar with sales to corporate buyers will mean your negotiations are more evenly balanced.

 
 Nicola Lomas of Goodman Grant Lawyers for Dentists

For more information you can call Nicola Lomas on 0151 707 0090

or email Nicola at [email protected]

NASDAL and ASPD MEMBERS

 

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