Location and premises are critical to medical practice success. Understanding commercial property considerations helps protect your investment.
Finding the Right Property
Location Factors
Consider these when selecting premises:
- Patient accessibility and parking
- Public transport access
- Proximity to hospitals and specialists
- Competition in the area
- Growth potential of the suburb
- Demographics alignment
Property Requirements
Medical practices have specific needs:
- Appropriate zoning and permits
- Adequate consulting rooms
- Reception and waiting areas
- Storage for medical records
- Disability access compliance
- Medical waste management facilities
Lease Negotiations
Key Lease Terms
Negotiate carefully on:
- Base rent amount
- Review mechanisms (CPI, market)
- Outgoings and how they're calculated
- Incentives (rent-free periods, fitout contributions)
- Initial term length
- Renewal options
- Conditions for exercising options
- Demolition clauses
- Specific medical use clauses
- Ancillary uses
- Restrictions on competitors
Fitout Considerations
- Landlord vs tenant responsibility
- Fitout approval processes
- Make-good obligations at end of lease
- Depreciation and ownership
South Australian Leasing Law
Many medical practice tenancies in South Australia fall within the Retail and Commercial Leases Act 1995 (SA), which applies to most retail and commercial leases at or below the prescribed rent threshold. Where it applies, the Act:
- Requires the landlord to give the tenant a disclosure statement before the lease is entered into
- Regulates how outgoings may be recovered from the tenant
- Restricts certain rent review mechanisms, including "ratchet" clauses that only allow rent to rise
- Provides a minimum five-year term in defined circumstances
The South Australian regime differs from the equivalent legislation in other states, so confirm whether the Act applies to your lease before signing.
Common Pitfalls
Avoid these mistakes:
- 1Signing without legal review
- 2Unclear make-good obligations
- 3Inadequate option terms
- 4Missing permitted use clauses
- 5Unexpected outgoings increases
Conclusion
Commercial property decisions significantly impact practice viability. Professional legal advice during lease negotiations protects your interests long-term.