A commercial lease isn’t just a real estate document. It’s one of the most important business contracts a healthcare practice will ever sign. It dictates your construction rights, operational flexibility, and long-term financial health. Unfortunately, most first-time practice owners approach leases as if they’re standard forms with minor negotiable points.

They’re not.
A lease can either support your vision or suffocate it.

Below are the most common mistakes seen in dental and medical leases—and the consequences that unfold when they aren’t caught early.

1. Signing Before Completing a Feasibility Review

Many owners fall in love with a space, negotiate rent, and begin lease drafting before determining if the building can actually support their clinical and mechanical needs.

This leads to costly problems:

  • Insufficient HVAC tonnage
  • Inadequate electrical service
  • Plumbing limitations
  • No ability to core drill
  • Incompatible column spacing
  • Imaging installation restrictions

A feasibility review identifies the physical realities of the suite. Without it, you’re moving blindly into a long-term commitment.

2. Assuming the Landlord Understands Healthcare Requirements

Most landlords don’t.
Not because they’re difficult, but because healthcare is highly technical.

Common misunderstandings include:

  • Underestimating plumbing quantities
  • Restricting penetration of floors
  • Prohibiting mechanical upgrades
  • Enforcing quiet-hours restrictions that conflict with construction
  • Treating imaging equipment like normal appliances
  • Thinking “office use” automatically covers healthcare procedures

If it’s not written explicitly, don’t assume it’s permitted.

3. Accepting a Weak or Generic Use Clause

A vague “general office use” provision is insufficient. It must explicitly allow:

  • Dental or medical services
  • Sedation (if applicable)
  • X-ray / CBCT imaging
  • Sharps and biohazard waste
  • Odor-producing procedures (OS, endo, perio surgery)
  • Any specialty-specific treatments

A narrow use clause can prevent you from delivering the services your business relies on.

4. Ignoring Assignment & Subletting Restrictions

Here’s a hard truth:
Your practice is worth far less if your lease prevents you from transferring it.

Common pitfalls include clauses requiring:

  • New personal guarantees from buyers
  • Excessive approval timelines
  • Landlord discretion with no standards
  • Assignment fees
  • Restrictions on transferring to another provider or entity

When it’s time to sell, an inflexible transfer clause can destroy the deal.

5. Overlooking Relocation Clauses

Some leases allow the landlord to move your practice to another suite at their discretion.

For healthcare users, this is disastrous.

Relocation means:

  • Shutdown time
  • Rebuilding your clinical space
  • Permitting delays
  • Potential loss of visibility
  • Patient confusion
  • New inspections and approvals
  • Construction cost exposure if the clause isn’t 100% landlord-funded

If you see a relocation clause: either remove it or narrow it aggressively.

6. Not Verifying HVAC, Electrical, and Plumbing Capacity

Healthcare practices place heavier demands on the building than typical tenants.

Failing to confirm load capacity triggers:

  • Change orders
  • Delayed construction
  • Tens of thousands in unplanned upgrades
  • Disputes over who pays for infrastructure improvements

A landlord may say, “It should be fine,” but healthcare relies on engineering, not optimism.

7. Chasing the Highest TI Allowance Instead of the Best Lease Terms

A big TI allowance feels like a win.
It often becomes a trap.

Problems with TI-centered decision-making:

  • Landlords recoup allowances through higher rent and escalations
  • Large TI allowances may require using the landlord’s contractor
  • “All-in” packages rarely include healthcare-grade MEP
  • Allowances don’t solve lease restrictions

TI is one variable, not the whole equation.

8. Accepting Uncapped Operating Expenses and Pass-Throughs

Hidden costs include:

  • Capital improvements
  • Roof replacements
  • Parking lot repairs
  • Legal fees
  • Administrative markups
  • Excessive CAM charges

Healthcare users rarely budget for unpredictable NNN swings.
Uncapped costs can turn a reasonable deal into an expensive long-term liability.

9. Not Securing Early Access

Early access allows:

  • Design verification
  • Contractor bidding
  • Pre-construction planning
  • Permitting
  • Submittals & procurement
  • Early-site measurements
  • Equipment confirmation

Without early access, your opening date is at the mercy of lease commencement—an unnecessary delay.

10. Signing Without Clarifying Landlord Work vs. Tenant Work

Every project hinges on this distinction.

Ambiguity leads to:

  • TI allowance disputes
  • Additional out-of-pocket costs
  • Change orders
  • Delayed permit applications
  • Finger-pointing during construction

A detailed “work letter” is essential to define:

  • Who installs HVAC
  • Who handles electrical upgrades
  • Who demolishes existing conditions
  • What is delivered in the landlord’s vanilla shell
  • Timeline expectations

Never leave this section vague.

Conclusion

These mistakes share a theme: owners focus on rent and free months while overlooking the clauses that directly impact buildout, operations, and long-term stability.

A smart lease frames:

  • Your rights
  • Your protection
  • Your infrastructure
  • Your growth plan
  • Your exit strategy

Avoiding these pitfalls allows you to open smoothly, operate without interruption, and protect the value of your practice.

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