Opening or relocating a veterinary clinic involves many big decisions, and your lease agreement is one of the most important. A commercial lease isn’t just about rent—it sets the foundation for how your practice will operate for years to come. The wrong lease terms can limit your flexibility, increase your costs, or even jeopardize your ability to continue practicing in that location.
Mahan Law collaborates with veterinarians nationwide to safeguard their financial interests and long-term objectives through meticulously negotiated lease agreements. Whether you’re opening your first clinic or expanding to a second location, knowing how to navigate a lease negotiation is key.
Understand the Lease Type Before Negotiating
Before you begin negotiating, it’s crucial to understand the type of lease being offered. Many landlords offer triple net (NNN) leases, which require tenants to pay not only rent but also property taxes, insurance, and maintenance. While this type of lease can offer lower base rent, the additional costs can add up quickly.
Other types include gross leases, where the landlord covers most expenses, and modified gross leases, which split costs between landlord and tenant. Clarifying the lease type helps you understand the full financial picture and avoid surprises down the road.
Know What Terms Are Up for Negotiation
Almost everything in a lease is negotiable, especially if you’re signing a long-term agreement or bringing value as a stable, professional tenant. Key terms to focus on include:
- Rent and Rent Increases: Make sure you’re clear on how rent will increase over time. Fixed percentage increases or caps tied to the Consumer Price Index (CPI) are more predictable than open-ended escalations.
- Build-Out and Improvements: Veterinary clinics often require specialized plumbing for exam rooms, custom flooring, and other unique features. Try to negotiate a tenant improvement allowance (TIA) or ask the landlord to cover part of the build-out costs.
- Exclusivity Clauses: An exclusivity clause can prevent the landlord from leasing space to another veterinary clinic or similar business within the same shopping center or building, protecting your market share.
- Assignment and Subletting: If you ever sell your practice or merge with another, you’ll want the ability to assign the lease or sublet the space. Make sure the landlord can’t unreasonably withhold consent.
- Personal Guarantees: If your landlord asks for a personal guarantee, try to limit the amount, duration, or circumstances under which it can be enforced.
Pay Close Attention to Common Area Maintenance (CAM) Charges
Landlords often pass on costs for maintaining shared areas like parking lots and landscaping through CAM charges. These costs can fluctuate dramatically, so it’s essential to negotiate:
- A cap on annual increases
- A detailed list of what is and isn’t included
- The right to audit CAM expenses
Understanding and managing these charges can significantly reduce your overhead and make budgeting more predictable.
Consider Your Growth and Exit Plans
A veterinary lease shouldn’t just work for you today—it should give you room to grow or exit if necessary. Ask yourself:
- Can I expand into adjacent space if my clinic grows?
- Is there an option to renew the lease, and on what terms?
- What happens if I want to sell the practice or retire?
Look for lease terms that allow for flexibility, such as renewal options, rights of first refusal for additional space, and exit clauses in case of sale or early termination.
Get It in Writing—Clearly
Never rely on verbal promises. If a landlord offers incentives, makes exceptions, or agrees to specific build-out terms, ensure they are clearly spelled out in the lease. Ambiguity in lease agreements almost always favors the landlord.
A written lease should include:
- A detailed work letter describing who is responsible for improvements
- A schedule of rent increases
- A defined process for dispute resolution
- A clause explaining force majeure or unexpected events like natural disasters
Reviewing all lease documents thoroughly before signing is crucial to ensure your interests are protected.
Work with Legal Counsel Who Understands Veterinary Needs
Veterinary leases involve unique considerations that go beyond those of a typical office or retail lease. You need to think about noise, odor control, hazardous waste disposal, and client traffic—factors that may be unfamiliar to a standard commercial landlord.
At Mahan Law, we focus on helping veterinary professionals negotiate lease terms that align with their practice goals. With a clear understanding of the industry and how real estate terms impact clinical operations, we help veterinarians avoid costly mistakes and enter agreements with confidence.
Secure the Right Lease Terms From the Start
Negotiating favorable lease terms can position your veterinary clinic for long-term success. Take the time to review every clause, understand your rights and obligations, and ensure the lease aligns with your future plans. A well-negotiated lease can be the difference between thriving in a location and struggling.
If you’re preparing to lease space for your veterinary practice, Mahan Law can help you review and negotiate terms that serve your interests and support your growth. Contact us today for a free consultation.