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Medical Office Lease

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What is a Medical Office Lease?

A medical office lease is a type of commercial lease agreement an owner of a medical practice will sign with a landlord to rent a commercial space for their medical practice. The commercial space will need to be equipped for the unique needs of a medical practice, which may include examination rooms and places to house unique medical equipment.

A commercial real estate lawyer with a background in the medical industry will serve as a valuable resource for medical practice owners during commercial lease review and negotiations with the potential landlord. These lawyers are equipped with a unique background to understand the common terms in medical office lease agreements, and understand what is fair and needed to make sure the medical practice is set up to succeed.

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Common Terms in a Medical Office Lease

Medical office leases can vary based on their terms, but below are some common terms you may find:

Rent Amount and Escalations

The first thing you will want to understand is what the monthly rental amount is for the lease and if there any baked in escalations. Rent escalations can be common in commercial leases since their terms can be 5-10 years in length.

Use of Premise Clause

This clause will outline how the commercial space can be used by the tenant. As it relates to medical practices, you will want to make sure the medical practice can use the space to meet all of the unique requirements a medical practice will have.

Improvements and Modifications

Common for medical offices, modifications and renovations may be required to make sure the space is suitable to run a medical practice. Understanding what a tenant is allowed to do in terms of improving the space is important to make sure it fits your plans.

Maintenance and Repairs

The medical office lease will outline who is responsible for maintenance costs and any repairs that may be needed throughout the lifetime of the lease. Make sure you understand who is responsible for paying for these so you can budget accordingly and have no surprises in the future.

Compliance with Laws

A medical practice lease will reference local and federal regulations, especially ones related to healthcare facilities. Some of these regulations may be related to HIPAA for patient privacy and the ADA for patients with disabilities. You will need to make sure you’re in compliance with these regulations so you do not breach the lease agreement.

Renewal & Termination

Lease agreements will have language around when and how the lease renews or how a tenant or landlord can get out of the lease. Make sure you are clear on this language and know any obligations you may have for renewals or terminating the lease.

Insurance Requirements

Lastly, a medical office lease will detail the insurance requirements (type of policies and amount) a medical practice will need to have to stay in compliance with the lease. Landlords will want to make sure the medical practice is covered so they reduce their default risk in the future.

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Elbert Thomas is the founder of the Thomas Law Group, LLC. Elbert is proficient in contract creation, drafting, reviewing, and negotiating various business contracts and demand letters in industries such as construction, personal, professional services, non-profits, and real estate. Elbert typically represents small and large companies in drafting and negotiating countless agreements such as purchase sale agreements, interconnection agreements, lease agreements, demand letters, cease & desist letters, transfer of deeds in real property, and merger/acquisition agreements. In addition, Elbert is also experienced in start-ups, small business formation, drafting operating agreements, and estate planning.

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Laurie R.

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Berkson is a dedicated, practical, and detail-oriented attorney licensed to practice in every state court of Oklahoma and the United States Northern and Eastern District Courts. He graduated from the University of Tulsa College of Law with Honors. While there, he received awards for highest grade in trial practice, legal research, and civil procedure. He was also the Executive Notes and Comments Editor for the Energy Law Journal, the official journal of the Energy Bar Association in Washington, D.C. The Energy Law Journal is one of the few peer-reviewed journals in the legal profession. Prior to becoming an attorney, Howard Berkson held executive positions involving a wide range of business and human resources management functions. He has in-depth knowledge of both business and HR practices. During his business career, Berkson negotiated, wrote, red-lined, and disputed contracts. He has answered charges, handled inspections, and supervised audits involving numerous agencies including the Department of Labor, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, and various state agencies. Berkson honed his analytical and writing skills while earning his Bachelor of Arts degree in Philosophy from the University of Washington. He went on to obtain a Master of Arts in Labor and Industrial Relations from the University of Illinois. Berkson’s work can be found in such publications as The Energy Law Journal, Human Resource Management Review and Personnel Psychology. He is a member of Phi Alpha Delta law fraternity and of Phi Kappa Phi honor society.

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