As commercial real estate practitioners are aware, most leases contain provisions that require a tenant to be in compliance with all applicable laws, but medical leases must specifically address and require compliance with Healthcare Referral Laws. While there are many similarities between standard commercial office leases and medical office leases, many considerations pertaining to and regulations contained in the Stark Law and the Anti-kickback Statute are unique to medical office leases.  This is especially true in leases where both the landlord and the tenant are physicians or other healthcare providers. These rules are designed specifically to prevent physicians and other healthcare providers from receiving payments based on the volume and value of the referral of patients.

In a standard commercial lease, the ownership by the landlord and the relationship with the tenant rarely have an effect on the structure of the lease or the determination of the rental rate. In the medical leasing context, however, the ownership structure of a landlord and the relationship of the tenant will impact whether a valid relationship may occur.

As for the lease itself, we have provided several items that we suggest you have handy when preparing to enter into a binding relationship with a landlord, tenant or third party.  Each bullet point has a detailed explanation to which we suggest contacting an attorney that is privy with Healthcare Referral Laws.

Medical Lease Checklist

• Standard office lease review
• Stark Issues
• In writing, signed by parties, identify rental space
• Term for at least one (1) year
• Rent at fair market value
• Set in advance (four (4) elements for amended rent)
• Tenant improvement allowances
• Landlord concessions
• Holdover rent must be consistent with market
• Amount of space is reasonable and necessary for proposed use
• Lease is commercially reasonable even if no referrals
• Holdover no longer than six (6) months
• Subleasing and Timesharing Arrangements
• Subleases must independently qualify
• Sharing of common space/staff issues
• General prohibition on per-click arrangements
• Durable medical equipment issues
• Protect against issues created by change in tenant/landlord ownership
• Allow amendments for compliance with regulations
• Medical qualification provisions – hospital staff obligations
• Hospital-imposed use restrictions
• HIPAA privacy and security concerns
• ADA compliance issues
• Excluded individuals
• Use restrictions to limit practice area
• Medical wastes – clearly document responsibilities
• Utility services – ensuring continued service
• Signage issues