SUBLEASE AGREEMENT - DOCTOR'S OFFICE
Information & Benefits:
Often, in an effort to conserve resources and benefit from the availability of an additional medical physician, one doctor will lease or sublease to another doctor the use of such office
space and facilities. The parties understand that they will both use the premises exclusively for the practice of medicine by and through their own individual practices at any and that they will be utilizing the office at the same time.
Because the success of the office may depend in large measure on the individual success of each practice, the doctors have an extra incentive to cooperate more closely than in a typical landlord/tenant relationship. However, most jurisdictions have strict standards for separate practices working together. Therefore, it is imperative that the parties represent and warrant to each other that this Agreement is not made for purposes of causing or securing a fee or other compensation for the referral of patients to and/or from each other. In addition, it should be expressly stated that rent and expense payments charged do not include any discount, rebate, kickback or other reduction in charge intended to be an inducement or payment for referral of patients.
Scope of Lease/Sublease
The parties share back office staff, medical and business equipment, medical and office supplies, and any and all other items incidental and normal to the ordinary operation of a medical doctor's office.
legal description of the improved real estate and space being leased.
A shorter lease can benefit the tenant in a "soft" market. However, it is usually better for a tenant to negotiate a longer lease term simply because they may be able to lock-in a fixed rental rate over a much longer period of time (like 5-10 years).
The entire amount due for the year should be indicated and broken down into payments for respective months. First month's rent is usually due upon execution of the lease and thereafter in advance on the first day of the month. In many states, commercial rents are subject to the imposition of a sales tax. 7. Restrictions on Use - Use must be limited to the practice of medicine.
Often, the parties share these expenses depending on actual use. However, in other cases, the Tenant may be responsible for his pro-rata share according to the square footage he is renting notwithstanding actual use. In addition, the parties must abide by all laws, rules, regulations, codes, etc. In cases of violation, landlord has right to enter to investigate and/or correct. If a lien is filed on property as a result of tenant, tenant must cancel/discharge the lien and wholly indemnify the landlord with respect to any liens or other encumbrances. Tenant may not maintain any hazardous materials on the premises.
Billing and collecting should be performed independently for each party. Each party should maintain his own provider numbers, billing records, bank accounts, etc.. Notwithstanding such, the billing
and collecting function may be performed by the same members of the Office Staff.
Each party should be solely responsible for securing and paying for their
own malpractice insurance.
Each party should be solely responsible for the proper administration of their respective professional corporations including, but not limited to, corporate banking accounts, taxes and returns, applicable insurance, resolutions, annual fees, and all other manner of effort and/or expense related to properly maintaining the corporate structure.
Condition of Premises
Often, improvements require approval by the city following an application and notice of improvement by the tenant or landlord. For convenience sake, the landlord will want to retain ownership of any improvements to the space without compensation to tenant. Finally, landlord will want standard provision requiring tenant to keep the space clean and safe, keep all equipment in good working condition, and refrain from making noise or objectionable odors.
landlord is generally responsible for maintenance of the exterior walls and roof and all ventilation, plumbing and electrical not otherwise inside the leased space. Interior fixtures must be maintained in good working order by the tenant. Tenant is solely responsible for damage tenant's articles within the leased space.
Assignments & Subletting
Requires prior written approval of landlord.
Tenant's Duties to Landlord
Indemnification provision related to injury to invitee, licensees and guests.
If tenant does not pay monthly rent after 15 days written notice, landlord may immediately terminate the lease and demand and recover from tenant expenses associated with early termination including actual and compensatory damages, interest and attorney's fees and costs.
landlord may terminate lease immediately upon notice of tenant's death, bankruptcy, and/or insolvency, or if tenant assigns any interest for the benefit of a creditor. landlord and their
successors and assigns may also terminate if the property's ownership changes hands, or if the landlord decides to remodel the property, or if the landlord decided to demolish the building. However, landlord usually provides at least six months advance written notice of such termination due to the anticipated action to avoid having to compensate the tenant.
Tenant makes his lease inferior to any future successor in interest of landlord.
As security guaranteeing payment of rent and performance of covenants. Any default by tenant will be paid out of this deposit, but will not cure the default nor act as a bar to landlord's rights of termination. Assuming no default, the security deposit will be returned in full at the expiration of lease term.
Landlord may, at a reasonable time, access space for inspection and repairs as may be reasonably required.
Security & Alarm Systems
Landlord may provide and charge tenant his pro-rata share. Conversely, tenant may be allowed to install their own system, but landlord should be given proper information and instructions with respect to any third party system.
Landlord provides for minimum amounts of insurance required by tenant from an insurance company approved by the landlord. (General liability with respect to Bodily Injury per person and per occurrence and Property Damage.) Tenant should be required to provide adequate evidence of such coverage in the form of a certificate from the insurance company.
Landlord usually pays this, but this expense is probably included in any operational
fees assessed to tenants.
Tenant may extend the term provided they are not in default of payment or other term. landlord must receive written notice of intent to extend the lease. Usually, 90 days or more. landlord should respond within 30 days thereafter.
Federal law requires disclosure to tenants of the lead-paint hazards. landlord should acknowledge the existence or non-existence of such paint and allow the tenant to conduct their own assessment prior to close.
Landlord warrants that the space leased hereunder shall be delivered to the Tenant in full compliance with all municipal, local, state and federal laws and warrants that the space leased hereunder is zoned for and may be utilized for the purposes contemplated herein.
Mediation and Arbitration
Mediation and Arbitration should always specify a convenient location (preferably, in the same county where they run their business). Mediation is a non-binding way to settle the dispute quickly and amicably. If unable to settle in mediation, arbitration is first option available. Arbitration is the preferred alternative to litigation because of speed, cost, and ability to maintain low profile (no info is publicly available).
No Modification or Waiver
No modifications except those specifically agreed upon by the parties in writing. Any waiver of a term or provision will not act as a waiver of any other provision.
This agreement constitutes the entire agreement of the parties and may be modified only in a writing executed by both parties.
Notices should always list the current and best addresses where each party may contact the other for whatever reason.
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