What Is a Shared Dental Space Agreement?

Operating costs can be overwhelming for solo practitioners. Rent, equipment leases, staff salaries, and compliance overhead sometimes consume 60 percent or more of collections before you see a dime. 

Shared dental space agreements let two or more dentists split these fixed costs while maintaining independent practices. In these situations, having a solid contract drafted by experienced attorneys specialized in partnership agreements that allocates liability, defines patient ownership, and satisfies HIPAA, OSHA, and landlord consent requirements is crucial.

Exploring a dental office space share or part-time operatory arrangement? Call (800) 499-1474 to draft an agreement that protects your autonomy, compliance standing, and patient base.

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Key Takeaways for Shared Dental Space Agreements

• Shared space agreements are licenses to use space, not subleases
• Patient ownership and records access must be defined explicitly; without clear terms, disputes over who owns the practice relationship can freeze operations and trigger HIPAA violations
• Fair-market-value rent set in advance protects both parties from anti-kickback scrutiny and makes sure the arrangement survives regulatory and lender review

What Is a Shared Dental Space Agreement and How Does It Work?

A shared dental space agreement is a contract between two or more dentists who use the same physical office, equipment, and sometimes staff on different days or shifts. Unlike partnerships or DSO affiliations, each dentist maintains a separate practice entity, bills under their own tax ID, and holds independent malpractice coverage. The agreement governs how parties split rent, utilities, supplies, equipment maintenance, and compliance responsibilities.

Shared arrangements fall into three legal structures:

• License to use space: One dentist (the licensee) pays the other (the licensor) for access to operatories, equipment, and common areas without acquiring tenant rights. The licensor remains the master tenant and holds all lease obligations.
• Sublease: The licensee becomes a subtenant with direct lease rights and obligations. This structure typically requires landlord consent and may trigger assignment or personal guarantee provisions.
• Co-tenancy: Both parties sign the master lease as co-tenants, sharing liability and tenant rights equally. This structure requires landlord approval up front and complicates exit planning.

Rent, Utilities, and Fair-Market-Value Considerations

Rent allocation in shared dental space agreements must reflect fair market value (FMV) to avoid anti-kickback scrutiny and maintain compliance with federal health care program regulations. If the licensee pays below-market rent in exchange for patient referrals or shared revenue, regulators may view the arrangement as an illegal inducement.

Set the rental rate in advance using objective benchmarks, such as comparable office space rates, local dental real estate data, or third-party appraisals. Document the FMV analysis in the agreement to withstand audits and lender scrutiny. 

Beyond base rent, allocate expenses for electricity, water, HVAC, common area maintenance (CAM), supplies and disposables, IT, and EMR access fees.

Patient Ownership, Records Access, and Non-Solicit Clauses

The most contentious disputes in shared dental spaces arise over patient ownership. Without clear contractual terms, both dentists might claim the same patient relationship, creating billing conflicts, records access disputes, and HIPAA violations.

Define patient ownership explicitly, including: 

• Patients treated personally by each dentist
• Front-desk scheduling protocols
• Records custody and access

Pair ownership rules with non-solicitation clauses that bar each party from actively recruiting the other’s patients, staff, or referral sources. Non-solicitation clauses must be reasonable, and enforceability depends on each state’s laws.

Shared Staff Arrangements and Employer-of-Record Responsibilities

Sharing hygienists, assistants, and front-desk staff cuts costs but creates employment law complexity. Generally, one dentist acts as the employer of record, withholding payroll taxes, providing workers’ compensation coverage, and maintaining compliance with wage-and-hour laws. The other dentist reimburses the employer for their proportional share of staff costs.

If both dentists want equal control over staff, consider forming a separate management entity that employs the team and contracts services to each practice. This structure requires additional legal drafting but avoids co-employment disputes.

HIPAA Compliance in Shared Dental Suites

HIPAA regulations govern how dentists protect patient health information in shared spaces. Each dentist is a separate covered entity and must execute business associate agreements (BAAs) with any third party, including other dentists, who access protected health information (PHI) for non-treatment purposes.

Shared space agreements should allocate HIPAA compliance responsibilities. Typically with each dentist handles their own policies, training, and breach reporting, while the master tenant manages vendor BAAs for common infrastructure.

OSHA, Sterilization, and Radiation Safety Responsibilities

OSHA regulations require dental offices to maintain infection control, hazard communication, and bloodborne pathogen programs. In shared spaces, both dentists must comply independently, but the agreement should clarify who manages day-to-day operations.

Allocate compliance duties regarding:

• Sterilization protocols
• Biomedical waste disposal
• Radiation safety
• Personal protective equipment (PPE)

Failure to allocate these responsibilities invites regulatory citations, cross-liability, and finger-pointing when inspections or incidents occur.

Equipment Maintenance, Calibration, and Damage Allocation

Shared equipment requires ongoing maintenance and eventual replacement. Without clear terms, disputes over who caused damage or who pays for repairs can paralyze operations.

Draft equipment provisions that address maintenance schedules, repair cost thresholds, replacement reserves, and damage liability.

Document equipment condition at agreement inception with photos, serial numbers, and maintenance logs. This baseline protects both parties when disputes arise.

Insurance Requirements: Malpractice, General Liability, and Cyber

Each dentist in a shared space must maintain independent malpractice insurance covering their clinical work. Occurrence-based policies protect against claims arising from treatment during the policy period, even if the claim is filed years later. Claims-made policies require tail coverage when the dentist exits the space.

Beyond malpractice, consider:

• General liability insurance that covers slip-and-fall injuries, property damage, and non-clinical incidents; confirm the master tenant’s policy covers licensees or require separate coverage
• Property insurance that protects equipment, furniture, and tenant improvements; clarify whose policy covers shared vs. exclusive-use items
• Cyber liability insurance that covers data breaches, ransomware, and HIPAA violation defense costs; increasingly required by EMR vendors and lenders

Name each party as an additional insured on the other’s general liability policy to streamline claims and avoid coverage gaps.

FAQ About Shared Dental Space Agreements

What Happens If One Dentist Wants to Terminate Early?

Most shared space agreements require written notice for license terminations. The exiting party typically remains liable for their share of costs through the notice period and must remove personal equipment, transfer patients, and return keys. Include buy-out provisions if either party invested in leasehold improvements.

How Do We Handle Marketing, Signage, and Branding in a Shared Office?

Define signage rights in the agreement. Clarify website URLs, Google Business Profile ownership, and whether each dentist can independently market the shared address without implying a partnership or affiliation.

What Dispute Resolution Mechanisms Should We Include?

Dispute resolution will depend on what the parties feel comfortable with. Mediation as a first step before litigation can preserve the working relationship and avoid costly court battles. Binding arbitration may suit others. Designate which state’s laws govern the agreement and where any legal action must be filed.

Draft Terms That Hold Up When Disputes Arise

Rent allocation, patient ownership, and compliance responsibilities create friction in shared dental spaces. Call (800) 499-1474 for help structuring a license agreement that protects your autonomy, satisfies landlords, and allocates risk before problems surface.

Schedule a Free Consultation