Dental Tribune United Kingdom Edition

Property update Ray Goodman discusses the current legal issues regarding the sale of a leasehold practice A s many clinicians will have realised, banks are becoming increasingly discerning when it comes to lending for the purchase of den- tal practices, tightening their requirements as well as their belts. Whereas before the cred- it crunch banks were falling over each other to lend for the purchase of practices (often at low margins over the base rate and with little securi- ty other than a charge over freehold property and in most cases they would take a view if therewasnofreehold),nowadays the terms on which they will lend are increasingly strict. Fortunately though, the win- dow of opportunity has not entirely closed, and dental prac- tices seem to be one of the few remaining sectors to which the banks are still lending, albeit somewhat more frugally. What we are seeing now, however, is that the banks are still prepared to lend but are seeking greater security; for example where the practice premises are leasehold, they are insisting on taking a mortgage over the lease and are looking for a minimum term of 10, 15 or 20 years left to run on that lease. In cases with a shorter period before the lease ex- pires, before the deal can go ahead it is necessary to ne- gotiate a new, longer lease with the landlord. There is no obligation for a landlord to re- negotiate the terms of an ex- isting lease, so it is a matter of negotiation as to which terms he or she may wish to impose. Fortunately, it often benefits the landlord to have a tenant tied in for a longer period of time, so they will usually cooperate as long as you agree to pay the legal costs involved. The proc- ess can take some time as the landlord is not under any obli- gation to deal with your request with haste and their solicitors’ fees may be substantial. If you are thinking of sell- ing your practice in the next year or so it is possibly worth starting the procedure to extend your lease as soon as possible so that the practice is saleable when you need it to be. Dentists choosing to go down this road are reminded of the impor- tance of having the work car- ried out by specialist solicitors. They will be familiar with the individual requirements the various banks lay out regard- ing the lease of dental practices. This is because in addition to the minimum unexpired term of the lease, different lenders have different requirements when it comes to the other provisions they may wish to include in the lease. Experienced solicitors working within the dental sec- tor will be able to navigate the legal minefield on your behalf to ensure you get the most value out of your dental practice. DT About the author Senior Partner Ray Goodman is a Member of the Association of Spe- cialist Providers for Dentists (ASPD), legal member of NASDA (National Association of Den- tal Accountants) and included on the BDA list of recommended dental solici- tors. He has a comprehensive under- standing of the commercial and pro- fessional objectives of Dental Practices, along with l the relevant legal require- ments. For more information contact Ray Goodman on 0151 707 0090, email: rng@goodmanlegal.co.uk The views expressed in this article are general and not intended as advice in any particular scenario. You should seek specific advice before taking any steps in relation to your property or practice. 11Money MattersFebruary 7-13, 2011United Kingdom Edition Everything you need. 68 EYN3 0111 DPAS focus on delivering a comprehensive plan administration service, providing our customers with everything they need to implement and promote their plans effectively. So if you’re looking for an efficient and reliable team who can help accelerate the growth of your business, without stalling you with unnecessary marketing fluff and costly extras, contact DPAS on 01747 870910. 01747 870910 www.dpas.co.uk Nothing you don’t. DPAS-EYN3-Car-A4 Junior.indd 1 16/12/10 09:58:47