Nuts and Bolts of Dental Lease Agreements post Covid-19

I can go ahead and begin with some of my introduction information. I'm Jeanne St. Louis of Jeanne St. Louis Consulting. For those of you that are new on our webinar today, welcome. We've been doing this now for about three weeks. I'm really happy with what we've been able to present and share to the dental community. You will see on your Zoom meeting that there is a Q and A button. We'd ask that you put your questions for Cecilia, our speaker today, in the Q and A area. If you do happen to put it in a chat, we'll gladly answer it. It's not like we're going to avoid it. If you would be so kind, just for fun, I always like to see where people are coming from. If you can put what area of the country you're in, that would be great. That kind of helps us to just get a feel for, hey, who's out there? What's the audience about? So that was fun. We've had quite a few from Canada in the past and that's always a fun thing. And seeing that I am nationwide, I have clients all over, so it's nice to see who's getting on and whatnot. You're anonymous, so you're okay. We're not going to call you out.

All right, so it's one o' clock now, so I'd like to go ahead and introduce our phenomenal speaker for today. I've been very, very lucky to be able to get Cecilia to come. She's a busy lady, which is always good, I know, but Cecilia is going to be talking about the nuts and bolts of lease agreements. Particularly, she's going to be addressing considerations in negotiating rent concessions with your landlord, as well as landlord requirements for providing rent deferment or abatement forge majeure and its relevance to your lease, important provisions when buying or renting a building, and then what provisions to protect your interest. So Cecilia, as I mentioned, is extremely talented. Aside from being beautiful, she has brains included. I mean, what more could you want?

She received her law degree from American University, Washington College of Law in the District of Columbia and her undergrad from Boston University in Boston, Massachusetts. While at American University, she was an associate editor of the International Law Journal and and graduated the top 10% of her class. She. There's a long bio here. As you can imagine, she's pretty, very talented. But I wanna focus in. She's been really focusing. Her extensive experience as a corporate attorney has assisted her immensely in servicing dentists in the healthcare industry, which include orthodontists veterinarians, optometrists, dental labs throughout California, nationwide. In specific, Cecilia provides counsel to clients in purchase and sales transactions. I worked with many deals with Cecilia in regards to purchase agreements and doctors who are buying another doctor's practice. She also does contracts and leases. I've worked with her many times with startup practices who are buying a practice and leasing and need their lease reviewed and help she helps them get incorporated. So I don't want to take up any more of her precious time because we know it's that we value her time and, and I'd like to introduce you to Cecilia.

Thank you, thank you for having me here today. I'm very honored to be here. Hi everyone. Thank you for joining us today. My name again is Cecilia Chen. I'm a dental attorney. I specialize in representing dentists and practice purchase and sales leases and contracts, employment manuals and partnerships. I'm licensed in California and Virginia. I moved to California from Virginia about, I would say, well, 13 years ago now. And I practice in California. So most of what I'm going to be discussing will be based on California law. I also work with many clients in other states where I associate with local councils. I've been practicing since 2004 and have specialized in a dental niche since 2011. So close to about 90% of my clients are dentists. I feel very honored to serve this industry. So I'm going to the topic today. We're going to talk about, you know, I'm going to go really in depth about, you know, lease agreement and you know, how it relates to, to negotiating concessions during the shutdown period or if you are looking to purchase a practice and assume a lease in the future or perhaps thinking about starting your own practice and assign a new lease. So.

Let'S see, first and foremost whether you are a current owner or a future owner of a practice, the lease is an extremely important document that impacts your rights and obligations not just as a tenant, but as a future seller of your practice. Your practice provides an income stream to you, but it's important to also remember that it's one of your most important and greatest investment. So it's important to pay attention to what's in your lease agreement and have an attorney, an experienced attorney on your side to review and make sure that you understand the rights and obligations you have under your lease, particularly in unexpected situations like we're facing right Now. So.

Since April 7, CDA has recommended that all routine and non emergency care be postponed for the rest of the country. I'm sure, all every state has a different reopen date for dental offices, but for the most part, dental offices have not been open since that time. With no income coming in.

What do we do about rent? So a few weeks ago we all read in the news that large national tenants like the Cheesecake Factory informed all of their landlords that they will not be paying rent. And many other tenants and many other large tenant national tenants also follow suit. I read about, I think 24 Fitness, 24 Hour Fitness, or some other couple of large national tenants. I personally disagree with that approach, particularly for smaller dental client dental tenants like all of you, where your lease might not be as favorable as a large national tenant or have as many protection in these lease agreements that are, that, you know, the large national tenants might have the leverage to negotiate when before, when they were signing their lease. And more importantly, I'm concerned about what rights you might lose when you're in the default status of your lease.

Okay.

The California governor has directed all evictions, including commercial tenants, to be halted during this time. It's important to keep in mind, however, that non payment of rent still constitute a material default under your lease. That can cause you to lose many significant rights under your lease. So eviction is not the only thing you should be worried about. You know, in particular, it might trigger the inducement recapture clause. And what that clause usually provide is that it'll obligate you as a tenant to repay any concessions that have, that might have offered to you when you sign the lease, such as tenant improvement allowance or free rent. Those are concessions that are typically offered to a new tenant or somebody who is renewing their lease to induce you to sign the lease from a landlord. And typically there is language in that provision that says you are required to pay auto dues inducement back to the landlord when you fall, when you become default under the lease. Okay? So you don't want to get yourself in a, in a bad situation where you might, you, you, you might be saving some rent for a couple of months, but then you have to repay all of those inducements. That could be a significant, significant amount. You know, in many other leases, you know, renewal options can only be exercised if you're not in default or if you haven't been in default in the last 12 months of the lease. Right? So that's an important consideration if you are at the end of your current lease term and would need to renew your lease very soon and exclusivity protection. So if you are in a retail shopping center, for instance, and you currently are under the exclusivity protection where you're the only general dentist or you're the only specialist, you know, allowed to be in that building, in that shopping center.

But that protection oftentimes is tied to the requirement that you are not in default of your lease. So by following default.

Into the default status of your lease, are you prepared to lose those significant, you know, protections under your lease as well? So hopefully by this time, you know, most of you have reached out to your landlords. But what kind of relief are you asking for? Right? And more importantly, what kind of relief are you entitled to under your lease agreement? Have you looked at your lease agreement to see what might, what you might be entitled to? So that's, you know, that's important.

And.

The most common relief I have seen.

Being offered by the landlord are rent deferment. So rent deferment means that you can stop paying rent for them, for example, for the months of April, May and June, for instance. But we'll have to repay those missed rent amounts at a later time. So whether it's beginning in January 2021 or at the end of the lease term, those missed rent payments will have to repay back.

So what are the conditions that are tied to the rent deferment? Right. I've seen some amendments, lease amendments, that, where the landlord is requiring the tenant to submit claims against their insurance companies. Now, contacting your insurance company to find out what coverages you might have is actually a really, really good idea, particularly if you have endorsements that cover infectious diseases without requiring any actual damage to your property. But being required to do so when you have to repay the missed rent amount doesn't seem right to me. And what if you do get coverage and a payout from your insurance company and the payout is greater than the amount of your total missed rent? Right. So what does that mean? Because I have seen language in some amendments that require you to repay and not, not just the rent miss, but assign over to the landlord the total payout that you receive from your insurance company. So if the payout is greater than the amount of your missed rent, is it fair that you have to, in addition to repaying the missed amount, but you actually have to pay that pay over that whole amount over to the landlord.

And you know, so actually a lot of lease agreements, if you read it carefully, it actually requires you to assign and turn over any payout that you receive from the insurance company.

So these are things that are important considerations that you need to know. And, and what are the strings that are attached to your rent being deferred.

And.

What is the long term benefit and cost involved? All right? And rent deferment typically again requires the missed rent to be repaid. And I've also seen in some lease amendments that require you to pay all of the missed rent if you get approved for the PPP loan. So now you have to be careful and tread lightly about how the PPP loan funds are used in order to qualify for loan forgiveness. Right? So if you are required to.

You.

If you're required to repay all of the missed rent using your PPP loan proceeds, are you going to risk potentially not have the greatest portion of your loan being forgiven at a later time? So these are all considerations you need to pay attention to. Getting your rent deferred is great, but again, like I said, you need to understand the conditions, the strings attached to getting the rent deferment. And rent abatement, on the other hand, is different from rent and payment rent deferment in that rent abatement doesn't require the Ms. Rent to be paid back. Okay, so I want to repeat that again. Rent abatement is very different from rent deferment because rent abatement doesn't require you to repay the missed rent back at a later time. So that's a lot more advantageous than rent deferment.

So how do you ask for or negotiate a rent deferment? Right, because it's a lot more ideal and advantageous than rent deferment. Well, first let's take a look at whether your landlord has been performing on the release himself that might entitle you to not pay rent. Is your building still open? Is the common area of your building and shopping center still being maintained by your landlord? Is the elevator still functioning? Is your office and building still getting H Vac turned on? There's a pretty good argument for renovatement if the landlord has not been performing and holding up their end of the bargain under the lease. Right. But you still need to put that in writing and negotiate in an artful way that doesn't alienate your landlord entirely. You do need these landlords on your side when your office reopens or when you try to sell it in the future.

So if none of these cases apply, if none of these situation apply, then we need to look at your lease on what your lease says. And it's very important to understand, especially in this type of situation where there are unforeseen events, this is the time to really understand and pay attention to your lease and hopefully also.

Gain an understanding of how important your lease is that governs almost all situations. So we look at your lease and you know, and everyone's been talking about force majeure. What does force majeure even mean? Generally, force majeure provisions are meant to protect the parties in the event that a contract cannot be performed. When an extraordinary event occurs that is outside of that party's control. For an event or circumstances to be considered extraordinary, it must be unforeseeable or unavoidable. And those events are frequently referred to as acts of God, such as earthquake, tornado, hurricanes and floods. And also war, civil unrest, terrorism, labor strikes, and inability to obtain materials or labor as a result of those. Foregoing examples are often included in the definition of a force majeure event. Okay, so if your lease has a force majeurer provision, does it include infectious disease and pandemic in its definition? And more importantly, does your force majeure provisions specifically state that the tenant's obligation to pay rent is not excused even in the event of force majeure? Right, because a lot of those force majeure provisions that I have seen that excuses certain performance.

Under your lease, but it doesn't. It makes exact. It makes an exception to the payment of rent.

So.

Sorry, I am.

So. From most of the force majeure provisions I've seen in the red in the lease agreements, it doesn't provide much help. Okay. Yeah. And many states including, including California also has a statutory provision that provides you with forced majority protection, even if it's not specifically stated in your lease, but you need to see in your lease if you have actually waived that statutory provision. And most cases, in most leases, there are a lot of waivers of statutory provisions. And this is a pretty common provision that is often waived. But regardless what I have, you know, in the best case scenario, when there are forced major provision in the lease that I have seen and read, I personally don't think it provides much help. You know, we can still make an argument out of it if there's nothing else. All right. If you know what you're doing. So, you know, we can argue COVID 19 should be considered a forced major event due to the government and regulatory agencies causing all dental practices to be closed and the language regarding it not apply to obligation to pay rent is against policy, unconscionable. Etc, etc. Etc. And you know, we lawyers can put a lot of fancy words on a piece of paper and believe it or not, you know, I have had some surprising good results for my client. But still, I don't like to rely on the force majeure provision because.

Especially if it goes to court, it's very uncertain.

Courts like to enforce a provision based on the specific language of the provision. And if the provision doesn't specifically say anything about pandemic or infectious disease, then there is a 50, 50 chance that the court will not enforce the provision. So I'm not saying it's not helpful, but I would prefer to look elsewhere. I have had much better luck in finding provisions in the lease agreement that specifically allows for rent abatement. Okay, there are provisions, if you look carefully in your lease, there are several provisions that actually state that in the event this happens, the rent will be abated in proportion to the usage of your space. So if your office has been closed, then, you know, the rent abatement should be 100% right. So what I personally like to do is fit the COVID 19 pandemic into one of those events and definitions that actually allow you to get rent abatement under your lease. So force majeure, even if it's in your lease agreement, it's not going to be the ace in your deck. It's going to be what's actually in your lease agreement that specifically allows for rent abatement that will get you the best result. So have your attorney, and if you don't have one, of course I will. I would love the opportunity to help to review your lease carefully and make a good argument that allows for rent abatement as provided for in your lease. And that is a lot more stronger than force majeure or then arguing for the fact that, you know, for other cases for rent deferment. And that's at the end of the day, that's what attorneys do, right? To formulate good arguments for their clients and get the best possible outcome for them. And I've had, and I have gotten very good outcome for many of my clients. But, you know, it again, depends on their lease, and it depends on the particular circumstance of their, of their situation and where they're located. And so, you know, if you are able to get rent abatement, you won't have to worry about paying it back like you would have to do with rent deferment. So that's what you know, you will want to go after. And what I have mostly seen from.

What I'm hearing from other people, is that a lot of practice owners are negotiating with the landlord on their own and not really look at the lease. And if the landlord offers them rent deferment, they happily take it and not really understand the conditions and strings of attached to getting those rent affirmations. So, you know, think more carefully because you might be entitled to a payment rather than deferment and you might be entitled to, you know, more concessions, more relief under your lease than you might realize. Okay, so it's not, you know, I know that we're all concerned about.

Office being closed. You're not generating the income that you're used to seeing and you don't want to spend any more money than you than you have to. But at the same time, you might be putting yourself in a worse off position that some of those conditions and strings attached to the rent deferment that you still have to pay back could actually cost you a lot more than you realize. So I just want that information to be out there and have you have a better understanding of, you know, what you're getting yourself into and agreeing to and the possibility that you might be entitled to a lot more relief under your lease than you might realize. Okay. Moving on to the lease agreement. And so I hope, based on what I have talked about in terms of, you know, negotiating concessions and in the unforeseeable event, there are a lot of unforeseeable events and that are covered in your lease that, you know, even though the pandemic, even though this situation might not be covered in the lease, but there's so many other things that you don't, you might not be thinking about it is in your lease. And it's really, really important to see how that might impact you in the event those unforeseen event happens in the future.

Right.

Because none of us have a crystal ball. None of us foresaw this pandemic coming. And there are other unforeseen events that might happen in the future that you are not expecting. So it really is important to pay attention to the lease. And I've seen so many of my clients that by the time they are at the end of their career and looking to sell their, sell their practice, and they never really paid attention to the lease and they thought, well, I've been here for 20, 30 years, it's worked out fine. And you know, I don't really know what's in the lease. So now I'm selling the practice and it turns out there are a lot of provisions in the lease that really has a huge negative impact to the practice owner and in my, in some cases, not being able to end up not being able to sell the practice at all. So I can't stress enough the importance of Paying attention to what is in your lease agreement. And if the lease agreement looks like just all these mumbo jumbo stuff that doesn't make any sense, and some leases are 60, 80 pages long, then how are you supposed to even, you know, read them? Because what you're good at is dentistry, right? We're all good at what we are good at. I don't know anything about dentistry. You put me in a dental office, I have no idea what to do. You put a patient in a chair in front of me, I'm gonna go. I have no idea. I don't know what I'm doing, Right? So stay focused on what you know and outsource important things to people who are good at what they, what they know. All right? I don't know anything about the industry, but I know a lot about contracts. I know a lot about lease agreements. So let's talk about a provision that's, that is very, very important in your lease because it will impact your ability to sell your practice in the future. And at some point, all of us, all of you guys will become a seller, right? Whether it's in one year, five year, 10, 20 years from now. Unless your, your exit plan is just walk away from your practice at the end of your lease time, which I don't recommend at all, because why would you. You have very, very valuable business asset that you have built up over time. You're not going to walk away, right? You are going to sell at some point. So in all of the transition transactions I have handled, I've got to say, the biggest piece of puzzle to a smooth transition is a good lease. And in particular.

Let'S talk about the assignment clause. The assignment clause allows the lease to be assigned and transferred from the current owner to the new owner to the buyer of your practice. Okay, so how does that impact you? The assignment clause for many of the leases I've seen sometimes are two to three pages long. And with all these things buried into the lease, for the benefit of who.

Not you as a tenant, it's for the benefit of the landlord because they're the one who drew up the lease, right? And the attorney representing them, they're going to be the one making sure everything is drafted in their client's favor, which is a landlord. So I have seen many assignment clauses that has the transfer premium provision. What does transfer premium mean? It allows the landlord to share a percentage of the proceeds from the sale of your practice when it's associated with assignment of the lease.

Let's let that sink in for a Minute. Okay. You having to.

Share a percentage of the proceeds of your from the sale of your practice with the landlord because that's what you had to agree to in the lease. You probably had no idea you had agreed to that. But that is actually buried in I would say 90 to 95% of the leases. I have read and I've read many, many, many, many leases. So is that even enforceable? It depends on the state and it depends on the judge. That's that you get the case in front of you in front of.

From, you know, in most cases.

Judges are not there to rewrite a commercial contract. They actually loathe rewriting any contracts.

Especially in commercial contracts, which a lease agreement is. They prefer to interpret exactly what's in writing, what's on that piece of paper. So if it's there, they're going to, they're going to enforce it because they're going to assume for both to commercial part two commercial parties. You, you have had the opportunity to understand before you entered into that contract it, it doesn't matter if you decided to not use an attorney and not really understand what you actually had agreed to. And plus, do you want to be the one to spend tens of thousands of attorney, tens of thousands of dollars of attorneys fees to litigate and to find out whether that's enforceable or not? Right. The ideal thing is to negotiate that out of your lease or before you even sign it. And there are provisions in the assignment clause that allows the landlord to increase the lease, increase the rent when you assign your lease. And that can be problematic when you, when you are selling a practice because all the, all the cash projections and the buyer's loan approval is dependent upon the cash flow and expense that's based on what you're currently paying in rent and the annual increases that are provided your lease. But if the assignment clause allows for a 20, 30, 50% rate increase, that's going to be problematic. Right. That's going to impact your buyer's ability to even get a loan.

Fund it at closing recapture clause there. It's commonly in many leases under the assignment clause that allows the landlord to terminate the lease entirely. When you ask the landlord for consent to assign the lease.

So.

Why would they want to exercise that? A lot of times the landlord wants a different tenant mix. A lot of times they have a different plan for that. For the spot where your space is located, there are many, many reasons that they might want to terminate the lease. Or you have been there for a long time and you might be paying under Market. Right. That right that allows them to terminate your lease when you ask for consent to assign your lease will most likely.

Make.

The sale of your practice not possible entirely. Because without the lease, without ability to get in that space, what is there left to sell?

Not much. Right. Even the equipment is all in that space and tied to the space. And so the only thing you're going to be able to sell are just probably patient charts. And it's not going, it's going to be a small fraction of what you would normally be able to sell, normally be able to get in a sale of a full practice release for any. And that's an important, important consideration for any seller because in most leases the.

Lease requires that the tenant, which is a seller, to remain primarily liable under the lease after you assign the lease. So do you want to be continue to be liable indefinitely after, after you assign the lease after you sell the practice? Of course not. Right. So we will want to negotiate that release.

To a more smaller period. So perhaps after a certain period after the sale of your practice, then you can that the tenant seller can be released under release. So that's just a few considerations, you know, regarding the assignment clause renewal options. So even if you have renewal options, are they transferable to your buyer when you sell your practice? Okay. Most lenders will require that the, that the remaining term of your lease equal to.

The term of the loan. So if the term of the loan, most loans are 10 years, if the terminal loan is 10 years and you only have two years remaining, that's going to be problem, right? But you're going to say, well actually no, it's not a problem at all. I only have two years remaining on my lease, but I have two five year renewal options. So that's 12 years.

Right?

So that shouldn't be a problem. You're only half right, that shouldn't be a problem. That's great that you have two five year renewal options, but are they assigned up to your buyer? And that's the million dollar question. Most leases will say that they are not assignable. So if they're not signable, that could be a problem. That could be another big bump in the road when you're selling your, your practice. I have had a case where it's not assignable. And the landlord, you know, after a lot of discussion, a lot of begging, a lot of negotiation with that landlord and he said, okay, that's fine, I understand you, you know, in order to sell your practice, you, you got to have those renewal options assigned. I will agree to it, okay, but I need to get paid. I want $100,000. I'm not, this is not a hypothetical. This actually happened in one of my transactions.

I'm bringing this up because these are all these very, very important considerations. And so often we look at a lease, you know, when we signed a lease and we think, oh, I love the location, I love the business terms that my broker has, has negotiated for me. I'm happy with the rent, I'm happy with the concessions, I'm happy with the improvement allowance. I'm happy with this, I'm happy with that.

I don't need to worry about anything else. And that's a really big mistake. And sometimes that mistake doesn't come to haunt you until 10, 15, 20 years from now. But, and it's a, it's a, it's a, it can be sometimes a very big, big mistake. Very avoidable relocation clause. That's a clause often in the lease agreement that allows the landlord to relocate you to another space in the building, another space in the shopping center. So what you had hoped for and that, what you thought you were getting into a very visible space that's very close to the anchor tenant of the shopping center. And after you spend hundreds of thousands of dollars to build out that space, turns out the landlord has the right to relocate you to another space with a 30 day notice to you. And that, that could be extremely detrimental. And not even in many cases I've seen it doesn't even include the cost of build out for the landlord, okay for them to build out your new space. So that cost needs to be paid a lot of attention to. Exclusivity is another one. You know, if you are fortunate enough to have that protection, exclusivity protection, that you're the only dentist, you're the only specialist in that space in that entire shopping center. Make sure again that it's not, it's transferable to your buyer because that's what the buyer is going to be relying on when they purchase your practice in the future. And if you're not, if they're not going to have that protection, then their revenue is going to significantly decrease. Then they're going to want the purchase price, your asking price to be adjusted significantly.

For a new construction lease. If you are going to build out your space and if you're thinking about building out your space in the near future, I actually do think that this is a good time to think about buying a practice or starting a new practice and looking at new locations. Because landlords have been more Flexible than I have seen in years. In years. They are more willing to offer bigger concessions. They're more willing to work with you. They're more willing to.

Put in extensions in dates in the lease that requires you to pay rent. So if you have plans to buy a practice or, you know, start a new construction, start a new office, this is, I definitely do think this is a, this is a good time that you, you can possibly negotiate a lot more concessions than probably even just a few months ago that things that I didn't think was possible even just a few months ago, I am now seeing my clients get. So I definitely do think this is a good time for somebody who's willing to take the risk to take that step. So in a new construction lease, where you're building out a new space, you want to pay attention to three dates in your lease. Aside from everything else I had mentioned, and there's so many other things and I can talk about, literally I can talk about lease agreements for a whole day because there's so much in the lease agreement that that's important for you, for you to pay attention to, for you to understand, but we don't, none of us have a whole day. So let's make sure that you understand those three dates. Delivery date, lease commencement date, and the rent commencement date. Okay, Delivery date is when the landlord is going to deliver the space to you.

So typically for a new construction, you will have negotiated that the landlord will do certain work to that space before it's delivered. Right.

Unless it's a completely empty shell. So if that's what you have negotiated, and that's what you have negotiated. But, but typically instead of an empty shell, landlord is going to put in electrical system, for instance.

The landlord is going to put in the mising wall. The landlord is going to put in a plumbing system or H Vac.

So those basic systems that you might need that the landlord is going to provide, that's going to be tied to the delivery date. But make sure that the delivery day takes into account a potential delay that is not tied to a specific date, like August 1, 2020. Right. Because we don't know if.

The landlord is going to be able to do all the work that they have promised to do by that August 1st date. But if you're going to tie the delivery date to a specific date, that can potentially.

You know, create problems if their work is delayed. And that delivery date is important because that's tied to another date, which is the rent commencement date. So the lease commencement date is when the Term of your lease is when the term of your lease starts. Okay? So that's not necessarily the rent commencement date. Rent commencement date is when you have to start paying rent. Typically that's about six months after your lease starts. And your lease typically starts when you, when the space is delivered to you. So that delivery date is tied to the lease commencement date, which is when your lease starts and the rent commencement date, and is tied to the construction period. So all three of those dates have very, very important significance because they ultimately is tied to your obligation to pay rent when you have to start paying rent. Okay? And you got to make sure that the definition, how those three dates are defined takes into account of force majeure. That specifically includes COVID 19 and any other pandemic that might happen in the future. Labor strike, shortage in materials, a lot of the different things. So that your obligation to pay rent ultimately will be extended if there is a delay in construction on your end. When or if there is a delay in construction on the landlord's side.

Tenant work letter, that's something that you gotta pay attention to because that kind of, that's the document that's typically an exhibit that goes with your lease that addresses the work that you need to do to build out your space. And it also specifically addresses how the improvement allowance is going to cover and how it is going to be paid out. So, you know, you want to make sure that the improvement allowance covers the design and planning of your space, right? And you know, it covers your, the construction cost and it doesn't exclude things that shouldn't be excluded. And how is it paid out? Is it paid out at the end when everything is done or is going to be paid out in phases? So if you, if you're getting a construction loan where your lender is going to be in charge of, you know, paying out, paying out the cost to your contractor in phases, that might not be an issue. But if you're not getting a loan and you are relying on that allowance to build out your space, then you will want to make sure that the improvement allowance is paid out in stages instead of all the way at the end. When you're, when all the, when the construction work is completed and when the, you know, when you get lien release and permits, okay? Because that could cause a huge problem if you don't have all of the funds available to build out the space on your own completion bond, is that required? And if it is, how, you know, what is the expense involved? Can you negotiate to not having to obtain a completion Bond. The completion bond is basically, it's a bond like an insurance that you put up to ensure that your contractor is going to complete the project for your space. And if your contract walks in the middle of your job, then.

The bond will get somebody else into the place to get the job finished. Is escrow required? Escrow is often used when.

The entire construction cost is put into an escrow company and then the escrow company will take care of distributing the cost to pay out the cost to your contractor. And that again, it's forced doable. But what is the expense involved? Right. The escrow sometimes can cost a good amount of.

Money and so does completion bond. So you got to pay attention to what's written in the, in the tenant work letter and also a lot of times in the, in that tenant work letter, it talks about the contractors you are allowed to pick and the electrician and all the subs. Does it have to. Do you. Are you obligated to use the. Your landlord's contractor or do you have the freedom to use your own contractor.

And the subcontractors? And do you have to use contractors that belong to a certain union? Right. There are a lot of fine prints in those documents that you need to pay attention to.

So.

I have covered everything. Not everything, but most of what I think is important for the lease. And I hope that you guys all found my information to be helpful and I'm happy to take on.

To take any questions you guys might have.

Thank you, Cecilia. You did cover a lot and it was very, very helpful. I think one of them, one of, you know, there were a lot of really good points that you pointed out, but one of the things that I think that dentists are probably going to be thinking of, and some are already thinking of it, and I've gotten calls and I'm sure you have, and some are maybe toying it in their mind and milling it over. There are some dentists that are looking at buying practices, or you may be on the line right now and you may have colleagues or associates that are looking at buying practices. It is a good time. It's a great time to negotiate. It's a great time to do a startup. It's, you know, there's two different ways to look at it. I typically, you know, would recommend that if you are a practice that is thinking about doing another practice, like a satellite location or another location or doing a startup location, to really look at your own practice first. Because I think, and Cecilia, you probably can agree or not with me, but I have found that dentists that generally want to start a second practice if their first practice, or as I like to say, if your first house isn't in order, it's hard to then open another practice and kind of just assume, well, the first one isn't doing so good. So I think I'll go open another one and that one will be better. Many times what I see is doctors make the same mistake that they made the first time, they just repeat it. So I think you have to really kind of be due, diligent about looking at your existing practice to see what you could do differently. I think looking at your lease is a first step because like Cecilia mentioned, there's lots of different clauses in the lease that could harm you in one way or the other. I know, I've heard, and I'm sure Cecilia has heard many doctors say, you know, oh, my brother in law's friend or my brother in law is a divorce attorney, but he's going to look at this commercial lease, or I have a sister who's a family attorney or what have you. I would just caution you to just be mindful that, you know, they're just like dentists, they're specialists. They're specialists in law and so to just choose your right corporate attorney. And Cecilia is a great resource for that. So she's a great attorney. So thank you so much, Cecilia. We've recorded this. This will go on our YouTube channel, YouTube and then just search Jean St. Louis Consulting and the recording will be on there. Give us 24, 48 hours. Please subscribe. If you subscribe, you'll get notices as we add more webinars to that channel. So that would be helpful. And please follow us on Facebook and LinkedIn and Instagram and let us know your handles and we'll follow you as well. I'm going to throw up a poll that I would ask you to fill out. This has been a fun exercise that we've done almost every time now and it's just great to get different people's feedback and where they're at on things. First question, first thing is nobody is being. We don't track your name or who you are or anything, but, you know, what is your position? Are you a dentist? Associate, hygienist? Rda? Just answer. Go ahead and start the polling. How comfortable do you feel to open or return to your practice or office? Are you 100% comfortable? 90%, 80, 70, 60, 50 or 40% or below? Have you received any PPE or EIDL funding yet? You know, PPE only EIDL, both or none?

Come on, we only have one. Come on, I know you can do it. Get in there. Guys, what would you like to learn about in future seminars? Business, Clinical, hr, Legal, Marketing leadership? What changes did you make to your marketing service, if any? Do you have any designated person performing your social media? Do you have any communication systems or digital signage in your waiting room? Do you have any patient educational videos? So, please, we'll give you a few more minutes to go ahead and answer that. It's kind of nice when we can see just as we go up, how is it going? I've done these all along. They're different questions every time, but they're really nice. Again, if you have any questions, kind of pop them into the QA. I don't see any chats or QAs yet, but I'll leave this polling open for a little bit. And please feel free to answer. It's great to kind of see where you all are. I see the numbers clicking up. We're getting more people comfortable.

So please, you know, just keep, keep answering. I'll leave it up for, you know, usually we leave it up for a few minutes. We want to thank you. We've got a great, great webinar coming tomorrow. Taylor Callander from Minty Content is going to be speaking. She is who does my social media? If you like what you see about me and my social media, I think it really has a real good personality of Taylor behind it, for sure. She's excellent. She's going to be speaking tomorrow and next week we have a full lineup of some great, phenomenal webinars going on. I hope you get the invitation. Pass it along to your friends, share it with your colleagues, post it on your social media sites. We'd love for you to help us. Just share the knowledge. It's great. I mean, it's not very often that you get some really talented people like Cecilia in to be able to really kind of start speaking about what's important to Dennis. So we are very grateful for that.

Thank you for having me.

Good, good. So what have you. What. What is your first thing that you're gonna do once you're able to get out and be unlocked? Where will be the first place you'll go?

I'm asking you, Cecilia.

Oh, you're asking me? Oh.

Gosh. I don't even know all the places I want to go. And realistically, it might not be safe.

I know, I know.

I want to go to the beach. I want to take my kids to Legoland. I want to go to Vegas.

Yeah. Yeah. It's funny. I asked that question one of the first webinars I did, and people were answering and answering, and I think I gave options of, like, a rest. What's your to go to your favorite restaurant, to go see family, to get your hair cut, to go to a salon, movies, whatever. And bar none, across the board, it was to go see family first. So that was kind of cool. So. All right, well, I'm gonna go ahead and end the polling. Thank you so much. And we look forward to, you know, seeing you all next week. And once again, I want to thank our guest, Cecilia. You were awesome. Thank you so much for sharing.

All right, take care, everyone.

Be safe.

Be safe.

Thank you.

Sam.