Tag: commercial lease

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7 Things To Do Before Signing a Commercial Lease

Are you preparing to sign a commercial lease for your company in California? It is a big step. Location matters—as does ensuring that you have a well-drafted lease agreement. Once you have a spot picked out, there are some key things that you need to do before you sign a commercial lease. Here, our Fremont commercial lease attorney highlights seven things to do before signing a commercial lease in California.

1. Visit the City’s Planning Department

You need to be sure that your business can operate in the location in which you are interested. With that in mind, you should start by confirming that your intended use of the property is legally permitted. In California, every city has zoning laws that regulate what type of business can operate in a specific location. If your business requires a zoning permit, learn how long the approval process will take. You should also ask about building permits, occupancy permits, and any other requirements specific to your area.

2. Review the Timeline for Permits and Approvals

Even if your business type is allowed under zoning rules, you may still need construction or occupancy permits before opening. These processes can take weeks or even months, especially if inspections or modifications are required. You should ask the planning department for an estimate of the timeline. If approvals will delay your ability to open, that knowledge becomes valuable during negotiations with the landlord. It is important because you may need rent abatement or other concessions while you wait on permits.

3. Inspect the Property With a Licensed Contractor

Is the property in as good of shape as it looks? You need to be sure. A professional inspection by a local, licensed contractor is an invaluable resource. The contractor can identify potential ADA compliance issues, the scope and cost of any necessary buildout, and the condition of critical systems such as plumbing, electrical, HVAC, and the roof. Commercial spaces can hide expensive problems that only an expert will recognize.

4. Estimate Buildout Costs and Timelines

Most commercial spaces are not “plug and play.” There are exceptions, but even with second generation spaces where a similar business was the tenant in the recent past, some work will likely be required. Your business may need new walls, lighting, flooring, or accessibility upgrades. Understanding the cost and time associated with buildout allows you to evaluate whether the space is financially viable.

5. Be Ready to Negotiate With the Landlord

Once you have all the relevant information, you will be in a strong position to negotiate. Seek concessions such as free rent during construction, reimbursement for buildout, or landlord-funded improvements. Do not be afraid to push for terms that protect your business, especially if the landlord is eager to fill the space. A lawyer can represent you to negotiate for a more favorable commercial lease.

6. Have a California Commercial Law Attorney Review the Lease

Commercial leases are complex legal contracts. Before signing, have a qualified attorney review the lease to advise you on your rights and responsibilities. An attorney can propose amendments that address important tenant protections, such as limits on personal guarantees, fair allocation of maintenance responsibilities, and options to renew or expand.

7. Always Plan for the Long-Term

Finally, commercial tenants in California should think beyond the immediate move-in. You must consider how the lease terms will affect your business growth, exit strategy, and liability in the future. For example, does the lease allow subleasing if you outgrow the space? Are rent increases capped or tied to market conditions? Does the lease require you to restore the property to its original condition at the end of the term? A long term plan is best.

Contact Our California Commercial Lease Agreement Lawyer Today

Lynnette Ariathurai is a California business attorney with the knowledge, skills, and experience to handle commercial lease agreements. If you have any questions about what you need to do before signing a commercial lease, we can help. Contact us today for a fully confidential consultation. We draft and review commercial lease agreements throughout the Bay Area.

business lease, commercial lease, commercial lease negotiation, leasing property for business

How to Buy or Sell a Medical Practice

Buying or selling a medical practice is complicated. Beyond the complexities that come with any major commercial transaction, there are also specialized legal considerations for the owners and operators of medical practices in California. In this article, our Fremont business law attorney discusses some of the most important things to know about buying or selling a medical practice in Northern California. If you have any specific questions, please do not hesitate to call our law office.

Due Diligence: Make Sure Your Counterparties are Reliable

You should never buy or sell any business without conducting thorough due diligence. Broadly defined, due diligence is an investigation, inquiry, and general exercise of care that a person should take before entering into an agreement.

Due diligence is essential when buying a medical practice. You must have a full understanding of the financial position of the business, including its assets and potential liabilities. Due diligence is no less important when selling a practice. Make sure your counterparties are reliable.

The Structure and Components of the Deal

The structure and components of a purchase agreement matter. Of course, this starts with determining the appropriate purchase or sale price for the medical practice. Parties should also pay very close attention to the structure of the transaction. You may be best off with a stock sale, whereby the entire medical practice is purchased. Alternatively, the parties may prefer an asset sale in which the buyer purchases specific assets held by the practice. It is always the best practice to have a medical practice purchase agreement reviewed by an experienced business lawyer.

Unique Concerns for Buying or Selling Medical Practices

Doctors and other medical professionals who are buying or selling a practice in California should be aware of some of the unique federal and state regulations that will impact their rights and responsibilities. Among other things, these include:

Restrictions on ownership: Any transfer of ownership of a medical practice in California must conform to the requirements of the state’s Moscone-Knox Professional Corporation Act. Medical practices are generally structured as PCs (professional corporations) — there are restrictions on who can own these business entities.
Patient notice: The Medical Board of California has regulations in place regarding patient notice when a practice is sold to another party or intends to close. Make sure that patients are notified of the transaction as soon as possible.
Medical records: The Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires medical professionals (and medical practices) to protect sensitive medical records. HIPAA’s privacy requirements must be followed through all aspects of the sale.
Controlled substances: If the medical practice has access to any controlled substances, it is imperative that these highly-regulated drugs are handled properly in accordance with the applicable federal and state laws.

Finalizing the Sale of a Medical Practice

Before the medical practice sale can be finalized, there are several issues that need to be addressed. Once the final structure of the business purchase agreement is in place, be sure to attend to future-focused issues, such as tail insurance and whether there will be a non-compete agreement in place. An experienced California business lawyer can help you secure, organize, and complete all the legal and commercial documents that you need to finalize the transaction.

Consult With Our Bay Area Business Law Attorney Today

Lynnette Ariathurai is a top business lawyer with the skills and experience to represent medical practitioners with buying or selling a medical practice. Contact us today for your fully confidential initial consultation. We serve communities throughout the Bay Area, including Fremont, Newark, East Bay, Union City, Hayward, Santa Clara, Milpitas, San Jose, San Leandro, and Gilroy.

commercial lease, medical practitioners, navigating medical practice lease, negotiating medical practice lease

Navigating Leases for a Medical Practice

A commercial lease is the legal foundation of a relationship between a business and a landlord. If you own and operate a medical practice in the Bay Area, navigating a lease agreement can be especially complicated. There are some unique issues that should be considered and addressed as part of your commercial lease. In this article, our California contract review attorney highlights some of the key issues to consider when drafting and negotiating a lease for your medical practice.

Key Commercial Leasing Issues for Medical Practitioners

Any successful medical practice needs an appropriate space to operate. The commercial property that you set up shop in should be well-suited for the particular needs of your practice. Additionally, the commercial lease that you operate under should provide an appropriate amount of legal protection. Some of the key issues that should be addressed in a commercial lease for a medical practice in California include:

Cost: You should have a clear definitions of the costs associated with your commercial lease. As a starting point, there must be a clear structure for how rent is calculated—either as a fixed monthly rate or as a percentage of revenue/profits. Additionally, a lease usually specifies responsibility for utilities, taxes, common area expenses, and other costs.
Liability: Liability is an important issue in a commercial lease — particularly for medical practitioners. A commercial landlord may try to include terms that shift liability towards your medical practice. Be sure to carefully review and fully understand liability risks.
Tenant improvements: In many cases, a medical practice needs to make certain improvements and alterations to a commercial space to operate. The lease should clarify two key things:
- Your right to make improvements
- Financial responsibility for any improvements
Weekend/night operations: Medical needs can arise at any moment. Many practices operate outside of normal working hours, including on nights and weekends. Make sure that your lease allows for weekend/night operations and ensure that the property is prepared. For example, the heat/air conditioning should be running.
Privacy (landlord access): Privacy is a major concern for medical practices. There are many state and federal privacy regulations in place to ensure that health care providers protect the sensitive health information of patients. It is a best practice to address landlord access to the property and other privacy concerns in a commercial lease agreement.
ADA compliance: The Americans with Disabilities Act (ADA) is a federal civil rights law that puts certain responsibilities on property owners, as well as businesses and business owners. Leases often include waiver of ADA compliance by landlord, and the burden shifts to the tenant to comply. A commercial space may need to be upgraded to ensure that your practice is in full compliance with the ADA. ADA complaints for non-compliance can be expensive.
Duration (termination and renewal): A commercial lease should always have a well-defined duration. Beyond that, the lease should clarify your rights and responsibilities regarding leaving the property before the lease ends and remaining in the property once the lease expires. Among other things, your lease should address forced moves to substitute premises, subletting rights, early termination options, and renewal rights.

Contact Our Fremont, CA Commercial Lease Lawyer Today

Lynnette Ariathurai has deep experience negotiating, drafting, and reviewing commercial leases. If you have any questions about navigating a lease for a medical practice, we are here to help. Contact us now for a confidential consultation. Our firm serves clients from our offices in Fremont throughout the Bay Area including Newark, Hayward, East Bay, Milpitas, Union City, San Leandro, Gilroy, San Jose, and Santa Clara.

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Medical Partnerships, Leases and Entity Formations

If you are planning to open your own medical practice in California, it is critical to understand how California law affects your ability to choose a business structure for your medical practice and to enter into business with other healthcare professionals. Generally speaking, California law allows physicians to operate medical practices as sole proprietorships, partnerships with other physicians, and as professional medical corporations. Other types of common business structures are not permitted under California law for healthcare businesses. Beyond entity formation, physicians and other healthcare providers who are considering the possibility of starting a new practice will also have to consider specific issues when it comes to leasing commercial space for a healthcare business.

Our experienced California business formation lawyer can help. Attorney Lynnette Ariathurai serves business owners throughout Northern California.

Forming a Medical Partnership

If you are thinking about opening a new medical practice and want to keep the structure of your business relatively simple, California law allows you to form a partnership (or to operate your healthcare practice as a sole proprietorship). However, any physician or other healthcare professional in California should learn more about the limitations of medical partnerships in relation to personal liability and taxation as well as the benefits of creating different business structures for the assets of the business versus the medical practice. Many healthcare providers and medical professionals who open new or are expanding practices find benefits in forming a professional medical corporation.

Professional Corporations for Medical Practices

Under California law, healthcare practices cannot form traditional certain business structures such as a limited liability company (LLC) or a corporation when forming a business. Instead, professional healthcare providers, including licensed physicians, surgeons, nurses, chiropractors, psychologists, optometrists, clinical social workers, and many other professionals must create a professional medical corporation. There are many benefits to forming a professional medical corporation, including limiting liability (some limitations arising out of medical malpractice), as well as tax benefits similar to those of an S-Corporation.

The Moscone-Knox Professional Corporation Act explicitly outlines the types of professional services that are provided in a professional medical corporation, and what kinds of healthcare providers or medical professionals can be officers, directors, and own shares in these types of corporations.

Commercial Lease Considerations for Healthcare Practices

In addition to the complicated issues surrounding entity formation for healthcare practices and businesses, it is important to work with a California business lawyer on any commercial lease for a healthcare practice. There are a variety of issues that you should consider in your lease beyond those that might appear in another kind of commercial lease, such as:

Tenant and landlord responsibilities concerning HIPAA and patient files stored on the premises
Medical waste and removal
Use of medical devices and storage of medical materials on the premises
CAM or NNN expense distribution between landlord and tenant
Parking space for patients

Contact a California Entity Formation Lawyer

If you are a healthcare provider and are considering your options for starting a new practice, it is critical to seek advice from a California entity formation attorney about the nuances of entity formation for medical partnerships and corporations, as well as the complexities of medical commercial real estate leases.

Attorney Lynnette Ariathurai is committed to representing business owners in Northern California and can speak with you today about medical entity formation. We serve business owners in Fremont, Hayward, San Leandro, Gilroy, Milpitas, Union City, East Bay, San Jose, Santa Clara, and Newark. Contact us for more information about how we can assist you with your new medical practice.

business attorney, california law, commercial lease, healthcare practice, Moscone-Knox Professional Corporation Act