Finding the right dental practice and signing a letter of intent are important milestones, but they are not the finish line. Many of the most significant legal steps occur between the initial agreement and closing. During this stage, buyers review contracts, complete due diligence, coordinate with lenders, and prepare the practice for a successful ownership transition. Overlooking these steps can create delays, increase risk, or leave important issues unresolved after closing.
Signing the Letter of Intent Is Only the Beginning
Many buyers view the letter of intent (LOI) as confirmation that the transaction is essentially complete. In reality, the LOI typically establishes the framework for negotiations rather than the final terms of the sale.
Once it is signed, the buyer usually begins due diligence while the parties negotiate the purchase agreement and other transaction documents. This period often uncovers issues that require additional discussion, revisions to the deal structure, or further documentation.
Approaching the LOI as the beginning of the legal process rather than the end helps buyers understand that important decisions still lie ahead.
Review More Than the Purchase Agreement
The purchase agreement is one of the most important documents in the transaction, but it is rarely the only agreement that affects the buyer after closing. A dental practice often operates under multiple contracts that should be reviewed as part of the acquisition process.
Depending on the practice, these agreements may include:
- Office lease documents and assignment provisions
- Employment agreements with associates or key staff
- Equipment leases and financing agreements
- Vendor and laboratory contracts
- Management or consulting agreements
Each document can create obligations that continue after ownership changes. Reviewing them together provides a more complete picture of how the practice operates and what responsibilities the buyer may assume.
Confirm That the Practice Is Ready to Transfer
Even when the buyer and seller agree on the terms of the transaction, additional steps may be required before the practice is ready to change hands. Some of these requirements involve third parties whose approval is necessary to complete the transition.
Buyers should confirm that issues such as lease assignments, licensing updates, and other required approvals are being addressed during the transaction rather than after closing.
For example, a lease assignment may require landlord consent, while changes involving the practice entity or ownership structure may require updates to organizational or regulatory records. Addressing these matters early can help avoid unnecessary delays as closing approaches.
A practice may be financially ready to sell, but it also needs to be operationally prepared for a smooth ownership transfer.
Plan for the First Day of Ownership
Closing the transaction is only one milestone. Buyers should also think about what happens immediately after ownership changes.
Questions worth addressing before closing include:
- How will patients be informed about the transition?
- Will the seller remain involved during the transition period?
- Are employment arrangements with staff finalized?
- Have banking, insurance, and operational systems been updated?
Planning these details before closing helps create continuity for employees and patients while allowing the buyer to focus on operating the practice rather than resolving avoidable administrative issues.
Coordinate Your Advisors Before Closing
Dental practice acquisitions often involve multiple professionals working on different parts of the transaction. Attorneys, lenders, CPAs, brokers, and other advisors each contribute specialized knowledge, but their work is most effective when it is coordinated.
For example, financing terms may affect the purchase agreement, while lease provisions may influence lender requirements or the overall transaction timeline. Changes identified during due diligence may also require input from multiple advisors before the parties finalize the deal.
When communication occurs throughout the transaction instead of only at closing, buyers are often better positioned to identify issues early and move through the process more efficiently.
Close the Deal With Confidence
The period between signing a letter of intent and closing a dental practice purchase is often where the most important legal work takes place. Taking the time to review contracts, coordinate advisors, and prepare the practice for transition can help reduce surprises after ownership changes hands. If you are purchasing a dental practice in Los Angeles, contact Polished Legal to keep the transaction on track.
