LEGAL REQUIREMENTS: A "no" answer to any of the following questions may mean your lease is out of compliance with applicable laws.
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Is the lease in writing?
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Is the lease signed by both parties?
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Does it specifically identify the leased premises?
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Is the term at least one year?
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Is the space reasonable and necessary for the proposed use?
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Is rent set in advance?
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Is rent at fair market value (FMV)?
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Tenant Improvement Allowance and other landlord concessions impact FMV.
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Rent does not take into account the volume or value of referrals.
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Is the tenant entitled to exclusive use, except for common areas?
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Is the lease commercially reasonable, even if there were no referrals between landlord and tenant?
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Are holdovers limited to six months?
COMMON PROBLEMS: Once you have confirmed compliance with Legal Requirements, look for these common problems.
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Signature missing or not timely obtained
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Dates of signature omitted
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Escalators not imposed (when contractually required)
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Missed rent payments
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Holdovers permitted past six months
WARNINGS: Both federal and state laws may be implicated. Some of the federal laws are noted below; check for state law counterparts and related legislation.
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The Stark Law
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Anti-Kickback Statute
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False Claims Act
SOLUTIONS: If you identify any failure to meet legal requirements or other problems with your leases to physicians, determine if any other exception or safe harbor applies. If not, develop a strategy to bring the leases into compliance and determine whether other legal action is necessary or recommended.