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A BONUS WORRY FOR THOSE WHO RENT THEIR SPACE. If you thought that renting your office space absolves you from any potential problems, let me put your mind at unease. The lender will almost always require the new doctor to have control of the office space for an amount of time equal to the term of the acquisition loan. Typically this is about 10 years and that control can be in the form of a single term lease or a lease with an initial term and a series of optional renewals. What landlords often realize at this point is that they are in the driver’s seat and if the buyer wants to be the new tenant, that privilege will come at a premium. Sometimes that premium is such that the practice is no longer affordable at the agreed-to price. Like- wise, while the landlord is very comfortable with the payment history of his long-time tenant, he knows virtually nothing about the buyer and may insist that the seller stay on the lease as a guarantor for a number of years. Selling doctors find that sort of long- term contingent liability distressing.


Let me leave you with one last uncomfort- able thought. In the post Great Recession


world of commercial real estate, buildings are financed on the basis of a formal, third party appraisal. The price the buyer and seller have agreed to can and will be overridden. Ap- praisals are time consuming and fairly expen- sive, a cost that may be subject to negotiation between buyer and seller. Waiting for that appraisal to “come in” is one more potential cause for the practice closing being delayed. We maintain a real estate license in our of- fice under the management of a commercial broker to help keep us on top of these issues and how best to handle them. While we ex- pect problems to occur, we like to think that market experience and a little prior planning can help ease the stress on both the buyer’s and seller’s side of a transition. f


DR. STEVE WOLFF (UMKC 1977) is a partner in ADS MidAmerica Dental Practice Sales (ADS Dental Transitions), which is an endorsed company of the MDA. Contact Dr. Wolff for western Missouri/ Kansas City inquiries (800-311-2039 or drwolff@ads-midamerica.com) or Guy Jaffe for eastern Missouri/St. Louis inquiries (guy@adsmidwest or 800-221-6927).


23rd Annual


Mizzou vs Kentucky Oct. 29 | Faurot Field | University of Missouri | Columbia MO


ISSUE 5 | SEP/OCT 2016 | focus 21


REGISTER AT MODENTAL.ORG/DAG


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