Dentists, physicians, and veterinarians routinely enter real estate leases that appear routine but contain provisions that limit operational flexibility or weaken negotiating leverage. Morgan Advisory Group advises healthcare professionals on commercial leases and real estate transactions, ensuring that terms support long-term practice goals.

Below are three high-impact provisions to review carefully.

1. Assignment Limits and “Personal” Renewal Rights

Many real estate leases restrict a tenant’s ability to transfer the lease to a future buyer. Some renewal options apply only to the original tenant and cannot be transferred during a sale.

Why it matters:

If assignment or renewal rights are limited, a landlord can renegotiate terms at the point of sale, or block the transfer altogether. This can depress practice value and complicate closing.

How to protect yourself:

Negotiate assignment language that allows a qualified buyer to assume the lease, including all renewal options, subject to reasonable landlord approval. Avoid renewal rights that are “personal” to you alone.

What not to do:

Do not upload this byte of information into a large language model and simply present it to the landlord. Negotiating options, renewal rights, and assignability can get complex, and you will want to avoid tipping off the landlord that you are not relying on counsel.   

2. Permitted Uses and Exclusivity

Each real estate lease should contain a clause defining the permitted use for a commercial space. Some commercial leases contain clauses providing the tenant with an exclusive right to engage in a permitted use within a building, development, or shopping center. 

Why it matters:

Restrictive or unclear permitted use clauses can limit service expansion. Without an exclusivity clause, a competing provider may open next door, diluting your patient base. 

How to protect yourself:

Ensure the lease clearly identifies your permitted services and anticipated growth areas. Where appropriate, negotiate exclusivity protection against direct competitors within the property or development. While these concepts are relatively simple, it can be hard to determine how hard to negotiate on these points without a broker or attorney providing advice and guidance on market conditions. 

3. Maintenance Obligations and Costs

Landlords typically pass maintenance costs to tenants. Whether through a triple net lease, or through a modified gross lease. Each lease type structures the pass through of certain maintenance costs to the clients. These costs include taxes, insurance, and common area maintenance expenses. These costs should always be reviewed and understood by the client, and negotiated by the client’s professional team. 

Why it matters:

Maintenance costs should be thoroughly understood by tenants to enable accurate budgeting and expense forecasting. Negotiating these terms, and capping increases on certain expenses, can further protect a client from unanticipated costs and expenses, which could severely hurt a client’s bottom line

How to protect yourself:

Define landlord and tenant responsibilities with precision. Address major systems, code compliance, accessibility requirements, and any obligations arising from future regulatory changes. Negotiate caps and limitations on costs and increases. Again, it is important to work with a professional to determine what types of caps and limitations are reasonable given market conditions. 

Plan Early to Protect Your Practice

Real estate terms influence both daily operations and future transaction value. Whether signing a new real estate lease, renewing, or evaluating a property during an acquisition, careful review is essential.

Morgan Advisory Group represents sophisticated healthcare professionals and investors in real estate and transactional matters. The firm ensures that lease terms align with operational needs, reduce long-term risk, and support future growth or exit strategies.

Request a lease review or consultation to evaluate your current or prospective terms.