Buying, Leasing Or Selling A Medical Practice In Ontario

Buying, Leasing, or Selling a Medical Practice in Ontario

There are many advantages when purchasing a Family Health Organization (FHO) practice. Nonetheless, there are also a lot of important factors to consider before you make the purchase. The substantial time, commitment, and costs involved all come into play with this transaction. However, as opposed to starting from scratch and building a practice with unpredictable income, you are guaranteed steady revenue from the initial start day when buying into an existing family practice. You can also count on enhanced operational performance and practical stability. Our lawyers at Pickford can direct you toward a stress-free process when buying a medical practice.

Who Is Eligible to Purchase Medical Practice?

In order to purchase or lease a medical practice, it is required that the individual is a licensed physician. Non-physicians cannot make this purchase.

Important Questions/Concerns to Keep in Mind Before the Purchase

  • Are you prepared to add your name to an existing office lease agreement, or sign a new one?
  • What are you willing to spend in order to step into ‘full’ medical practice immediately?
  • Is it a sole-run office, or a group office?
  • What is the present structure of the current expense reimbursement at the medical practice you are looking to buy?
  • How familiar are you with the surrounding factors of the business and administrative aspects of managing an FHO practice and roster?
  • How large is the group in the practice?
  • Is there only one location or are there other locations?
  • What agreements are currently in place in terms of partnership and group governance?

Medical Office Lease Considerations

It’s crucial that physicians take proactive measures to ensure they are protected from the potentially dangerous language in the medical office lease. As a physician, make sure that you are asking the right questions so that nothing comes as a surprise. It’s also important to ask the seller about their lease obligations. Here is one main question to ask the seller: Will the office lease be assigned to you or will you have to sign a new lease?

Evaluating Significant Lease Terms

It’s possible that sometimes there could be hidden details and risks throughout the lease documents – which is why the documents should be professionally reviewed before moving forward with the new venture.

Here Are A Few Terms to Consider:

  • Assignment Requirements: Are there any requirements in the lease that will affect your ability to sell or transfer the practice in the future?
  • Term of Lease: How long is your lease term, and do you have renewal options?
  • Personal Financial Obligations: Who is guaranteeing the lease? Will the lease be listed under your name? Will you be responsible for rental obligations in the event a future tenant fails to pay rent?
  • Protection & Security: If an unexpected event occurs, do you have a death and disability clause in place to protect you and your family if you’re unable to work?
  • Practice Location: Does your lease allow your landlord the right to relocate you? If yes, who pays for the relocation expenses?
  • Practice Expenses: In group dynamic cases, how are the expenses dispersed in the lease and what will you be responsible for covering on a monthly basis?

Selling A Medical Practice in Ontario

Before leaving your medical practice, there are factors that physicians should be mindful of. One of which is familiarizing yourself with specific requirements or guidelines that may apply in your jurisdiction. Contacting a legal professional at Pickford can help you understand the rules that relate to your specific jurisdiction. Whatever the reason for closing the practice may be, the following outlines some aspects to consider in the selling process.

What Is Your Medical Practice Worth?

Every meaningful measurement of value must be considered because every medical practice is unique. Determining the value of your practice depends on multiple factors. Usually, a buyer willing to pay the price of your practice takes a look at the income it generates month-to-month and additional offerings that are of interest to them. That could include administrative and clinical equipment, location, lease obligations, cost-sharing setups, etc.


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