Lease Advice for Chiropractors

The Commercial Lease Advice Chiropractors Need

Finding space for a new chiropractic office can be a daunting task.  That’s just half the issue.  How does a chiropractor negotiate the lease once the space is found?  Most commercial real estate terms are extremely confusing.  The problem with the chiropractic industry is that most leases are small enough that there is not much support from the real estate brokerage community (small leases = small commissions!).    

Here are the common mistakes chiropractors make on their commercial lease (and how to fix them):

Not Using the Landlord’s Money on Tenant Improvements

Landlords generally are willing to pay for the construction of leasehold improvements, via a tenant improvement allowance.  

This allows a chiropractor the ability to build the office without having to come up with the money upfront to do so.  

This is a big bonus, as the initial construction of the premises is typically the single greatest start up expense. 

The money is not free, however.  The tenant allowance is simply a loan.  Most landlords will charge 8% - 10% on the money.  While this is more expensive than what you could likely borrow money at, you will also not be dipping into your credit line for walls, doors, and flooring.  It will be reserved for hiring, advertising, and weathering the initial days of slow business growth. 

Agreeing to a Personal Guarantee

Guess what?  Most landlord templates come with a personal guarantee as an addendum.  

If you agree to signing this, you are liable for the entire rent for the entire lease term, even if the practice fails.  This is why we have corporations to begin with – to minimize personal risk.  

While this can be hard to remove, most chiropractors fall in love too much with the space and sign what the landlord tells them to, when instead they should be leveraging other properties in which personal guarantees are not required.  

The best compromise is to simply increase the security deposit.  While most leases have a two month (first and last months’ rent) requirement, a start up chiropractor could offer an additional 1-6 months’ worth of security deposit, which is far superior than agreeing to a personal guarantee.  Such a deposit should also decline over the lease (for example, it should start applying to rent starting in the 13th month).  

Agreeing to “Make Good” on the Space

Most chiropractors have the obligation to restore their premises to a “base building” condition at the expiry of their lease term.  That means tearing down all the walls and leaving the space in an exposed concrete condition, usually costing $5-$10 per square foot.  


This clause comes in every commercial lease, but the odds of removing it are high – as long as it is addressed at the offer stage, not the lease negotiation stage.  

Picking a Lease Term that is Too Short

Signing a long-term lease can give anyone anxiety.  But signing too short of a term has several drawbacks;  

  1. Amortization period that is too short.  Just like a mortgage, if the landlord is amortizing your tenant improvement allowance over the lease term, the monthly payments are lower if you sign a 10 year lease vs a 5 year lease.
  2. The landlord may hold you ransom on the lease renewal price.  If you signed a short term, you may be reluctant to relocate after a short period of time, and the landlord may attempt to charge a premium on the renewal price.  Tenants who sign longer terms are more committed to evaluating relocation options once those leases are due and tend to have more negotiating leverage.  
  3. Long term rental value.  In our experience, escalations on 10 year lease terms tend to be lower than for tenants that end up with 5 year leases, and rights to renew.    

Selecting a Hidden Location

There is a huge difference between retail rates for well exposed properties and not so well-exposed locations.  

The challenge is finding the right balance.  

A strong location, while painful when paying the rent every month, will also yield more clients without any effort – it is a visible advertisement for the business.     

It also helps with word of mouth.  The easier it is to describe a location to someone else, the more likely that second person will end up making the connection and come in for a visit.   


Carrie Wood is the Chief Marketing Officer for Lease Ref, an virtual real estate brokerage in Oakville that focuses on providing lease abstracts for small business owners, so they can negotiate their own commercial leases.  Carrie also assists with estoppel letters – the notice a tenant receives when a landlord sells a property.