Quick Summary
Three lease clauses can trap a healthcare tenant after signing. A recapture clause lets the landlord take back your space when you try to sublease or assign, gutting your exit rights during a practice sale. A relocation clause lets the landlord move you to a different suite mid-lease, away from the location your patients know. A co-tenancy clause, by contrast, protects you if key anchors leave. Negotiate all three at the letter of intent, before they harden.
Why Listen to Us
Mike Wolson is a commercial real estate broker and an Illinois-licensed attorney, rated 4.9 across 71 Google reviews. Most brokers never flag these clauses until they bite. As founder of +CRE, affiliated with Compass, he represents dental practices, healthcare providers, and service businesses across Chicago and its suburbs (tenants and buyers, never landlords) and reads the fine print for the clauses that decide what happens years after signing.
The Clauses You Notice Too Late
Most tenants negotiate the rent, the term, and maybe the buildout allowance, then sign. The clauses that cause the worst surprises are the ones they skip, the provisions that sit quietly in the lease until a specific event triggers them: a practice sale, a building reconfiguration, an anchor tenant leaving. By then the leverage is gone.
This guide covers three of those clauses. Two are traps that shift power to the landlord: recapture and relocation. One is a protection tenants should ask for: co-tenancy. All three are negotiated at the same moment, the letter of intent, and all three are far harder to change once the lease is signed.
This guide covers:
- The recapture clause, and how it undermines a practice sale
- The relocation clause, and how it threatens your location
- The co-tenancy clause, the one that protects you
- How the three connect, and when to negotiate each
The Recapture Clause: It Guts Your Exit
A recapture clause is the landlord's answer to a tenant who wants to sublease or assign the lease. Instead of approving the transfer, the clause lets the landlord terminate the lease and take the space back, often to re-lease it at a higher market rate rather than let the tenant capture the value.
For a healthcare practice, the danger surfaces at the worst moment: selling the practice. A buyer almost always needs to take over the lease, so a hard-won assignment right is central to the sale. A recapture clause can nullify it: the landlord recaptures the space, and the buyer must negotiate a fresh lease at current rates, complicating or even breaking the deal. Limit recapture at signing: restrict it to a full assignment rather than a partial sublease, or secure the right to withdraw your transfer request if the landlord elects to recapture.
The Relocation Clause: It Threatens Your Location
A relocation clause lets the landlord move your practice to a different suite in the building or complex, usually to accommodate a larger tenant. For most businesses this is an inconvenience. For a medical or dental practice, it can be a serious problem: your patients know your location, your signage points to it, and your buildout was designed for that specific space. A forced move mid-lease can mean lost patients, a second buildout cost, and operational disruption.
Resist an unrestricted relocation clause. Where a landlord insists, narrow it: require the landlord to pay all moving and re-buildout costs, guarantee genuinely comparable space (size, floor, visibility), provide long advance notice, and cover updated signage and marketing. Some practices negotiate it out entirely for the early years or the whole term. The clause looks minor at signing and becomes major the day it is invoked.
The Co-Tenancy Clause: The One That Protects You
Not every clause in this family works against the tenant. A co-tenancy clause is a protection worth requesting, especially for practices that depend on the traffic of an anchor tenant or a full center. If the anchor closes or occupancy falls below an agreed threshold, the clause lets you reduce rent or, after a cure period, terminate.
Co-tenancy matters most for healthcare-adjacent uses that rely on foot traffic, such as a med spa, optical shop, or urgent care in a retail center. If you signed partly because of a busy grocery anchor, you should not be locked into full rent when that anchor goes dark. The clause must define precisely which tenants or occupancy level trigger it, the remedy, and the timeline, because landlords resist broad co-tenancy protection. But asked for at the right moment, it is a genuine safeguard.
Recapture, Relocation, and Co-Tenancy: How They Differ
The three clauses are easy to confuse because they all govern what happens after signing, but they point in different directions:
- Recapture is a landlord right that limits your ability to exit; it attacks your sublease and assignment flexibility.
- Relocation is a landlord right that limits your control of location; it can move you against your will.
- Co-tenancy is a tenant right that protects your rent; it responds to the landlord failing to maintain the center's draw.
The practical takeaway: on recapture and relocation, your job is to narrow or remove a landlord right; on co-tenancy, your job is to add a tenant right. All three belong in the same conversation, because all three are decided before the lease is drafted and rarely reopened after.
What These Clauses Cost in Practice
The damage from these clauses is concrete, not theoretical. Consider a recapture clause: a physician spends two years building a practice, then sells it. The buyer needs the remaining eight years of the lease. The landlord recaptures the space instead, offers the buyer a new lease at a rate 20% higher, and the sale price drops to absorb the difference, a five- or six-figure hit that traces directly to one clause the seller never negotiated.
Or a relocation clause: a dermatology practice with a ground-floor, street-visible suite is moved to an interior second-floor space to make room for a larger tenant. Patients who found it by walking past no longer do; the practice absorbs a second buildout and months of reduced visibility. Neither outcome was inevitable; both were decided years earlier, at signing, by whether the clause was left broad or negotiated narrow. That is why reading for these provisions before the LOI is not caution for its own sake; it is protecting the value of the practice itself.
When to Negotiate Each
All three clauses are negotiated at the letter of intent stage, alongside rent and term. This is the moment of maximum leverage, before attorneys engage and positions harden. Raised during lease drafting, they are weaker; raised after signing, they are effectively fixed. These sit alongside the offensive and defensive protections covered elsewhere (exclusivity, renewal options, and right of first refusal, plus the transactional clauses in our guide to estoppels, SNDAs, and personal guaranties) as one negotiated package. For the broader exit toolkit, see our lease exit strategies guide.
How Plus CRE Helps
Plus CRE represents tenants only. Our lease negotiation and tenant representation work for healthcare providers and dentists catches these clauses before they are signed, narrowing the traps and adding the protections, while the landlord is still competing for your tenancy. Talk to us before your LOI goes out.
Frequently Asked Questions
What is a recapture clause and why does it matter?
A recapture clause lets the landlord terminate the lease and take back your space when you request to sublease or assign it, instead of approving the transfer. It matters most when selling your practice, because it can nullify the assignment right the buyer needs, forcing a fresh lease at market rates and complicating the sale.
Can my landlord really move my practice to a different space?
If the lease has a relocation clause, yes. It lets the landlord move you to another suite mid-lease, usually to accommodate a larger tenant. For a practice with a location-bound patient base and a custom buildout, this is a real risk, so narrow the clause or negotiate it out, and require the landlord to cover all costs and guarantee comparable space.
What does a co-tenancy clause protect me from?
It protects you when a key anchor tenant leaves or building occupancy drops below an agreed level. The clause lets you reduce rent or, after a cure period, terminate, so you are not paying full rent in a center that has lost the traffic you signed up for. It matters most for practices that depend on foot traffic.
When should I negotiate these clauses?
At the letter of intent stage, alongside rent and term. That is when you have the most leverage, before attorneys engage and positions harden. Raised during lease drafting they are far weaker, and after signing they are effectively fixed. Treat them as part of the same negotiated package as your other lease protections.
