Tenant Doctor Agreements Explained

A tenant doctor agreement is a contractual arrangement where a medical practitioner operates their practice within premises owned or leased by another party, typically a medical center or practice owner.

Key Elements

1. Nature of the Relationship

Unlike employment, a tenant doctor arrangement creates an independent contractor relationship. This has significant implications for:

Tax obligations

Professional liability

Practice autonomy

Income structure

2. Financial Arrangements

Common financial models include:

Percentage-based fees: The tenant pays a percentage (typically 30-40%) of gross billings

Fixed rental: A set monthly fee regardless of billings

Hybrid models: Combining fixed rent with percentage payments

3. Essential Terms

Every tenant doctor agreement should address:

Duration and renewal terms

Service fee calculation and payment

Equipment and consumables provision

Administrative support scope

Patient record ownership

Termination conditions

Restraint of trade clauses

Legal Considerations

Tax Implications

The ATO closely scrutinizes tenant doctor arrangements. Key factors they consider:

Control over work methods

Risk and responsibility allocation

Tool and equipment provision

Ability to delegate or subcontract

Insurance Requirements

Tenant doctors must maintain:

Professional indemnity insurance

Public liability coverage

Income protection (recommended)

Common Pitfalls to Avoid

Ambiguous terms: Ensure all financial arrangements are clearly documented

Inadequate notice periods: Both parties need reasonable exit terms

Restrictive restraints: Overly broad non-compete clauses may be unenforceable

Missing intellectual property provisions: Address patient lists and practice goodwill

Next Steps

If you're entering into a tenant doctor arrangement, we recommend:

Having the agreement reviewed by a healthcare lawyer

Understanding your tax obligations with an accountant

Ensuring adequate insurance coverage

Documenting all verbal understandings in writing