Although some veterinarians own the buildings in which they practice, many choose to lease office space. Successfully negotiating a veterinary lease requires specific experience and knowledge because—unlike home leases—commercial leases can be quite complicated. Therefore, before negotiating a veterinary lease, you should contact an experienced veterinary attorney for assistance. In this article, we examine common provisions that are typically included in veterinary leases.
A key veterinary lease provision is one that addresses the calculation of rent. A key distinction to understand regarding the calculation of rent in a veterinary lease is the difference between rentable square feet and usable square feet. Usable square feet is the actual size of the space being rented. Rentable square feet, however, combines useable square feet and a percentage of the square feet of common areas, such as hallways, lobbies, elevators, and stairways. The rate used in veterinary leases is usually based on rentable square feet.
In addition, veterinary leases are usually triple net leases, which means that the practice will also be responsible for paying insurance, taxes, and maintenance fees for the space and a percentage of the common areas.
If the space being leased was not previously used as a veterinary office, then renovations may be necessary. The details of such renovations are included in the lease. Although this can be expensive, it is often necessary to make a space useable. With the assistance of a veterinary attorney, however, the manager of a property may agree pay some of the expenses associated with renovating the property or agree to a short-term rent abatement.
Options for Renewal
A veterinary practice’s location is crucial to its success. Therefore, it is imperative to negotiate renewal options in a veterinary lease. Including options for renewal in a veterinary lease will potentially allow a practice to remain in one location for many years.
When a veterinarian leases space in a building or complex with multiple tenants, the lease should include a provision that forbids the landlord from leasing space to competitors. This is because the presence of other veterinarians in the same complex can negatively impact a practice’s value.
Assignment and Release
Finally, to protect a practice’s value in the event of a sale, a veterinary lease should include a provision that allows the practice owner to assign the lease to a buyer and releases the owner from liability under the lease following the completion of the transaction.
Contact Our Experienced Veterinary Attorneys
If you are looking to lease a space for your veterinary practice, Mahan Law is here to help. At Mahan Law, we provide advice and counsel to established veterinary practices and startups nationwide. Founding attorney Anthony Mahan routinely collaborates with co-counsel attorneys who negotiate commercial leases on behalf of veterinary practice owners in real estate markets throughout the country. Therefore, regardless of your location, we can help you secure a space for your veterinary practice. Please contact us to schedule a consultation with a veterinary lease attorney.