Thinking about buying a veterinary practice but worried about hidden costs? You’re not alone. Many buyers focus on the sale price and overlook the extra expenses that can add up quickly. A missed detail in a lease, a vague asset list, or an unpaid tax bill could all turn into unexpected problems after the deal closes. A lawyer can review the practice’s documents, ask the right questions, and point out issues before you commit.
Unexpected Financial Liabilities Hidden in the Fine Print
When you buy a veterinary practice, you might also take on debts the seller hasn’t fully disclosed. These could include unpaid taxes, past-due vendor bills, or unfiled employee claims. A quick review of the practice’s financial statements might not show these issues, so you should ask for complete records of every financial obligation. A lawyer can review the purchase agreement to flag hidden liabilities before you sign anything.
Lease Provisions That Could Cost You Later
Not all problems come from the sale itself—some could come from the lease. Some leases might allow the landlord to move your clinic or take a cut if you sell later. Others could limit how you use the space or who you can hire. Always review the lease terms carefully. Don’t just assume you can expand, renew, or stay put. A lease can quietly add costs if you’re not careful.
Misleading Asset Inclusions or Exclusions
Don’t assume you’ll get everything you see when touring the clinic. Some sellers remove items before the sale, like exam tables, lab equipment, or even office supplies. If the agreement doesn’t list specific assets, you might need to replace them yourself, which could add to your costs considerably. Ask for a detailed list of what’s included in the sale and compare it with what you actually need to run your practice.
Inflated Goodwill or Questionable Valuations
Some sellers ask for more money than the practice is worth. They might claim “goodwill” adds value because of long-time customers or good reviews, but that value could disappear if staff leave and take clients with them. Always question how the seller calculated the price. Make sure the valuation comes from someone who understands veterinary practices, not just general business sales. An inflated sale price now could hurt you later.
Inconspicuous Facility or Equipment Issues
Worn-out equipment and outdated clinic space can lead to big repair bills. A clean-looking exam room might hide plumbing issues, broken tools, or a layout that slows you down. Don’t trust surface appearances. Inspect everything and bring in a third party if needed. Ask how old the equipment is and check maintenance records. If the seller hasn’t kept things up, you might need to invest heavily right away.
Staffing Costs and Employment Contract Surprises
If you inherit staff, you could also take on contracts, unpaid benefits, or promises made by the seller. Some employment agreements might guarantee raises, bonuses, or long-term positions that can drive up your operating costs. You should review every contract and employee policy before purchasing. Don’t wait until after the sale to discover you owe someone back pay or extra time off. These kinds of surprises can drain your budget quickly.
Cash Flow Misrepresentations
Sellers might give you income numbers that look solid on paper but don’t tell the full story. Some clients might routinely pay late, or insurance companies might delay or cut payments. A busy schedule doesn’t always mean a steady income. Check how the clinic collects payments. Ask how often clients cancel or no-show. Look at how much cash actually comes in each month instead of relying exclusively on summary reports.
How a Veterinary Attorney Can Help You Avoid Hidden Costs
If you’re looking to purchase a veterinary practice, a veterinary attorney can help you spot hidden costs before they become your responsibility. At Mahan Law, we review purchase agreements, leases, contracts, and financial records with a sharp eye for anything that could cost you more than you expect. We know what to look for and how to protect your interests. Contact us today to arrange your free consultation and learn more about how we can help.