Subleasing Medical Office Space? Get It in Writing

With doctors often splitting their time between office visits and surgery or hospital rounds, it often makes sense to share the cost of medical office space between more than one practice group. A surgeon who is in surgery on Mondays and Tuesdays can see patients in the office Wednesdays and Thursdays and allow use of his/her office space for another surgeon with the opposite schedule. With space and resources at a premium, why should the office space go unused?

When a physician leases shared medical office space, a written agreement to allow another physician to use this space is not just advisable but necessary. Below are three reasons to make sure you have a sublease with another provider who wants to share lease space with you:

• Protection for Patient. Patient privacy and confidentiality are paramount in medical practice. Shared medical space increases the risk of inadvertent breaches of patient confidentiality. A written agreement can and should include clauses addressing how patient records and information are handled and how files are stored and protected, ensuring compliance with privacy laws and protecting patient data. Healthcare facilities must comply with various local, state and federal regulations, and a written agreement helps ensure that all parties adhere to these regulations, as it can include compliance clauses and responsibilities related to healthcare laws and standards.
• Protection for the Lease. In nearly all medical office leases, there is most likely a provision prohibiting the assignment or sublease of space without the landlord’s consent, and failure to adhere to this provision can be an event of default under the lease. If an event triggers an insurance claim, both the tenant and the landlord look to the lease to determine responsibility. If that event happens when someone who is not the named tenant on the lease or has not been approved by the landlord to practice in the space is operating in the lease space, the lease may place all responsibility on the tenant. If a dispute arises, having a written agreement helps clearly delineate responsibilities and liabilities.
• Protection for your Practice. Costs such as rent, utilities, and maintenance need to be equitably divided. A written agreement ensures that all parties are aware of their financial responsibilities and can prevent disputes over payment. It also provides a framework for handling unexpected expenses or changes in cost. If operating expenses, taxes and/or insurance for the building unexpectedly rise, a written agreement with a subtenant can help share these costs. A well-drafted agreement outlines how office resources and medical equipment are shared. It specifies the hours of operation, scheduling and access to shared spaces.

Conclusion

While the idea of sharing medical office space might be a practical solution for increasing efficiency and reducing costs, it is essential to approach such arrangements by documenting the agreements between the parties and making sure the landlord is aware. A written agreement is a vital tool in safeguarding legal, financial, and operational interests. By formalizing the terms of space sharing in a written agreement, doctors can clearly document how they will protect patient privacy while adhering to the lease and setting expectations for an office sharing arrangement.