What real estate professionals need to know when buying / selling veterinary clinics

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When buying or selling clinics, it is important to educate veterinarian clients about the importance of real estate. Real estate is always a contractual term, whether it is for sale or lease.

In representing the seller who owns both the clinic and the property, the seller must decide whether to become the buyer’s landlord or sell the property. Renting out premises to the buyer allows the seller to receive a monthly income in the form of rent; however, a seller with limited experience as a commercial landlord may decide to sell the land without title to the buyer. The preservation of the property also gives the seller the opportunity to sell the veterinary property to a company that specializes in said purchases. A compromise approach is the inclusion of a preemptive right or a call option in the lease.

Whether you are a corporate consolidator buyer or an individual professional buyer, the definition of their long-term goals influences their decision to buy or rent property. For example, a corporate consolidator may eventually want to sell to a larger consolidator and thus be less interested in buying real estate and prefer a lease term with softer lease assignment terms. A lone practitioner who buys a clinic may not have the capital to buy real estate at the same time. In this example, the buyer usually prefers a lease with the option of buying the property in the future.

Real estate transactions in veterinary transactions are an important point that must not be overlooked. When representing veterinary clients, it is best to discuss the client’s long-term goals and the pros and cons of selling or renting real estate associated with the practice.

Jeremy Mucella is an attorney for the Corporate, M&A and Veterinary Practice Group of Forchelli Deegan Terrana LLP, Uniondale, NY.

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