What should a dental lease work letter include?
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A dental work letter should spell out who builds what, how the TI allowance is paid, who approves the contractor and changes, and when rent starts. Husch Blackwell's December 2025 guide recommends a 10% holdback until punch-list items and final lien waivers are done (Husch Blackwell). The 18 items below are those most often missed in 2026.
Key facts
| Item | Recommended term | Source |
|---|---|---|
| Holdback | 10% until punch list and final lien waivers | Husch Blackwell (Dec 2025) |
| Excess costs | Pay no more than 50% before work starts | Husch Blackwell (Dec 2025) |
| Allowance offset | Right to offset if TI isn't paid within 30 days of meeting draw conditions | Husch Blackwell (Dec 2025) |
| Contractor | Approve GC from a 3-bid process; not required to take the lowest | Husch Blackwell (Dec 2025) |
| Rent start | Only after substantial completion and delivery | Husch Blackwell (Dec 2025) |
| Lease term | Dental leases typically run about 10 years | Henry Schein |
What is a work letter?
A work letter is the lease exhibit that governs construction of your space: the landlord's work, your work, the tenant improvement (TI) allowance and the schedule. Husch Blackwell calls it "the primary tool for protecting the move-in schedule, controlling construction costs, and ensuring a seamless transition," and notes landlords usually write the first draft (Husch Blackwell). Dental space needs more from it than ordinary office space, because the plumbing, power, vacuum and x-ray work are heavier.
Henry Schein's startup guide puts preliminary drawings after the letter of intent and before final lease negotiation, so you know what the space needs before you sign (Henry Schein). To test your floor plan in the space first, the free dream-practice builder (coming soon) is planned for sketching rooms, operatory counts and layouts.
The 18-item dental work letter checklist
Scope and delivery condition
- Landlord vs. tenant work, item by item. Separate base building (HVAC, electrical, life safety) from your leasehold improvements; vague language causes disputes (Husch Blackwell).
- Delivery condition. Broom-clean, building systems operational, base building code-compliant, roof watertight and free of hazardous materials, even in an as-is deal (Husch Blackwell).
- Base-building code fixes at the landlord's cost, without affecting your schedule or budget (Husch Blackwell).
- ADA responsibility. Both landlord and tenant are responsible under the ADA, and the lease can allocate who pays for what (28 CFR 36.201). Spell out building-wide vs. suite upgrades (Husch Blackwell).
- Dental utility capacity. Confirm the space has the plumbing and electrical a dental office needs (Henry Schein). One consultant cites 400–500 amps for the average dental office (Henry Schein (Tholen)).
Money
- TI allowance amount and eligible costs, including soft costs such as permits, design fees, security and card readers, data cabling and furniture, fixtures and equipment (Husch Blackwell). See how the TI allowance works.
- Draw mechanics and an offset right if the landlord doesn't fund within 30 days of the draw conditions being met (Husch Blackwell).
- Excess costs: visibility as they accrue, and no more than 50% due before work starts (Husch Blackwell).
- 10% holdback until all work, including punch-list items, is complete and final lien waivers are received (Husch Blackwell).
- Open-book pricing, bid tabs and audit rights (Husch Blackwell).
Control
- Contractor approval from three bids, with no obligation to take the lowest and the right to review bids for scope (Husch Blackwell). See how to choose a contractor.
- Budget approval and value engineering before construction (Husch Blackwell).
- Change-order approval, with cost and time impact up front; landlord-initiated changes shouldn't raise your cost without consent (Husch Blackwell).
Schedule and remedies
- Critical-path schedule with milestones for design, permits, construction start, substantial completion and delivery (Husch Blackwell).
- "Substantial completion" tied to a certificate of occupancy, with life-safety and MEP tie-ins done and only minor punch items left (Husch Blackwell). See certificate of occupancy for dental offices.
- Rent starts after substantial completion, plus liquidated damages and a termination right if the target date is missed (Husch Blackwell).
- Closeout documents: commissioning, O&M manuals, service records and warranties for building systems and roof (Husch Blackwell).
Dental-specific lease links
- Your equipment stays yours. Standard leases make improvements the landlord's property at termination; state that dental equipment and attached fixtures such as cabinets and chairs remain yours, and permit customary dental hazardous materials (Saalfeld Griggs). Settle restoration obligations at lease end too (Dental & Medical Counsel).
What does a work letter mean for your budget?
The allowance rarely covers a dental build-out. Model the gap before you sign: the free build-out cost & timeline calculator (coming soon) is planned to combine square footage, operatory count and region into a budget and schedule. See dental build-out cost per square foot.
Who should review it?
A dental-experienced real estate attorney. Dental & Medical Counsel recommends reviewing the permitted-use clause, TI allowance, personal guarantee, restoration obligations and build-out approval process before signing (Dental & Medical Counsel). This page is not legal advice.
How FloorStack helps
FloorStack is a dental build-out platform. Bring a floor plan and budget to the lease table so the work letter matches the real scope. Start at the Build a Dental Office hub, then read 25 questions to ask a landlord and second-generation dental space.
Free tools on the FloorStack dental build-out platform for this step: Build-out cost & timeline calculator (free tool, coming soon) and Dream-practice builder (free tool, coming soon).
Free tools for this step
- Build-out cost & timeline calculator (free tool, coming soon): estimate budget and schedule from your square footage, operatory count and region.
- Dream-practice builder (free tool, coming soon): sketch rooms, operatory counts and layouts on your own suite before you pay for drawings.
Frequently asked questions
What is a work letter in a dental lease?
It is the lease exhibit that sets the scope of landlord and tenant construction, the TI allowance and how it's paid, approvals and the schedule.
Who drafts the work letter?
Usually the landlord, which is why tenants should negotiate it with a dental-experienced attorney.
How much should I hold back from the contractor?
One law firm recommends a 10% holdback until punch-list items are done and final lien waivers are received.
When should rent start in a dental lease?
After substantial completion and delivery of the space in the agreed condition, according to tenant-side counsel.
What should "substantial completion" mean?
The space is legally occupiable under a certificate of occupancy, life-safety and MEP work is finished, and only minor punch items remain.
Can I use the TI allowance for cabling and equipment?
Only if the work letter allows it. Negotiate eligible soft costs such as data cabling and furniture, fixtures and equipment.
Sources
- Husch Blackwell: Before You Sign, A Tenant's Guide to Key Work Letter Issues (Dec 2025)
- Saalfeld Griggs: Dental Lease Tenant Checklist (Aug 2016)
- Henry Schein: Practice Startup Guide and Dental Office Lease (PDF)
- Henry Schein: Start-up Specialty Practice, What to Know Before You Break Ground (Mark Tholen, DDS)
- 28 CFR 36.201: General (ADA Title III, landlord and tenant responsibilities)
- Dental & Medical Counsel: A Dental Lawyer's Guide to Your Dental Office Build-Out
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