🏥 What to Know Before Signing a Medical Office Lease
Leasing medical space is very different from leasing traditional commercial property. Whether you’re opening a solo practice, expanding a dental office, or relocating a specialty clinic, your lease can impact everything from patient flow to legal compliance.
Here’s what healthcare providers in Arizona need to know before signing a medical office lease—and how to protect your investment from day one.
1. Confirm Zoning & Permitted Use
Just because a space looks perfect doesn’t mean it’s legally suitable for medical use.
Before signing:
Confirm zoning allows your type of practice (e.g., behavioral health, outpatient surgery)
Check parking minimums for patient volume
Verify ADA accessibility and build-out limitations
📌 Don’t rely on the landlord’s word—verify permitted use with the city or county yourself.
2. Understand the Scope of Tenant Improvements (TI)
Most medical offices require specialized build-outs—exam rooms, dental plumbing, imaging equipment, waiting areas.
Ask:
Will the landlord provide a TI allowance?
Who controls the design and construction?
What happens to unused funds or overruns?
Who owns the improvements at lease end?
📌 Put the build-out plan and allowance terms in writing—never in a side conversation.
3. Analyze CAM Charges & Operating Expenses
Medical tenants often sign triple net (NNN) leases, meaning you pay base rent plus a share of:
Property taxes
Insurance
Common Area Maintenance (CAM)
Red flags:
No cap on annual CAM increases
Inclusion of capital improvements in CAM
Landlord “discretion” over shared expenses
📌 Ask for a detailed CAM breakdown and negotiate caps where possible.
4. Watch for Personal Guarantees
If your lease is under your business entity (LLC or PLLC), the landlord may still require a personal guarantee.
Risks:
You could be personally liable if your practice defaults
The guarantee may outlast your lease term or apply to renewal periods
📌 Try to limit personal guarantees to a specific term or dollar cap—or negotiate to remove them after an initial payment history.
5. Know the Exit Strategy
Can you move, grow, or exit if needed?
Ask:
What’s the process for early termination?
Can you sublease or assign the space if your practice changes?
Is there a renewal option, and are terms pre-negotiated?
📌 Flexibility is key in healthcare, especially for growing or multi-location practices.
6. Address Compliance Concerns
Medical office leases must comply with:
Stark Law (if referrals are involved)
Anti-Kickback Statute (AKS)
Fair Market Value (FMV) requirements
HIPAA concerns if shared space includes PHI exposure
📌 A compliant lease isn’t just a financial decision—it’s a legal necessity.
Final Thoughts
Your medical office lease is one of your biggest long-term obligations—and one of the most overlooked sources of legal and financial risk.
Before you sign anything, have the lease reviewed by an attorney who understands both healthcare compliance and Arizona real estate law.
Hurley Law Group
Medical Leasing & Compliance Counsel for Arizona Healthcare Practices
📞 308-383-1867
🌐 hurleylawgroup.com
✉️ eric@hurleylawgroup.com