Better terms and flexible payments negotiated on a squat practice conversion

A dental associate converting a squat practice had a lease with no rent-free period and a large deposit with no return date. We negotiated directly with the landlord on both points. The client secured a six-month rent-free period and a reduced deposit returned within two years via escrow.

The Situation

A dental associate looking to set up a squat practice had found a property to convert and came to us for help with the finance. As part of the application process, we needed the lease and deposit details from the landlord, standard information for any finance application. When we obtained them, a problem became clear that had nothing to do with the finance itself.

The lease as it stood had no rent-free period at all, and a large rent deposit was required with no fixed date for its return. For a squat practice, where the building generates no income until the conversion is complete and the practice is trading, that combination is a genuine cashflow risk. Every month of rent paid before the practice opens is a month of cost with nothing coming in to offset it, and a deposit with no clear return date ties up capital indefinitely, capital that would otherwise be available to help fund the conversion itself.

What We Did

We discussed the benefits of negotiating a rent-free period directly with the landlord, not just to reduce cost, but to give the client time to actually complete the conversion before rent obligations began, since starting the rent clock too early can put pressure on a build that hasn’t even finished. We also raised the size of the rent deposit and pushed for the client and landlord to agree a specific return date, along with how the deposit would be held so the client’s own funds stayed protected throughout the tenancy rather than sitting in an arrangement with no clear end point.

The Result

After we helped negotiate, the client secured meaningfully better terms than the lease had originally offered. The landlord agreed to reduce the rent deposit and return it within two years, held on an escrow account for the client’s protection. More significantly, the landlord agreed to a six-month rent-free period, which eased the cashflow pressure on the practice considerably once it opened and started trading, giving the new business genuine room to find its feet before rent became a monthly obligation.

The lesson for anyone converting a squat practice: the lease terms matter just as much as the finance behind them, and a rent-free period isn’t something landlords offer by default, it’s something worth negotiating for specifically, ideally before the finance application is even finalised, since the terms of the lease directly affect how much breathing room the practice has in its first year.

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