The
48 Professional
Advisory For Dental Professionals
IN THIS ISSUE SALARIES VS. DIVIDENDS. WHAT’S BEST? David Chong Yen CFP, CA
OVERPAID LONG TERM STAFF Graham Tuck H.B.A C.A
ASSOCIATE AGREEMENTS PART 1 David E. Rosenthal BA., LL.B.
INVESTOR PARALYSIS 2.0
REVIEW YOUR LIFE INSURANCE NOW! Dr. Ian Wexler
RENEWAL OF THE LEASE REFUSED Ian Toms B.Sc. (Hons)
A DYNAMIC FOR EFFECTIVE COMMUNICATION Dr. Ron Weintraub
Mark McNulty BA, CFP, CIM
plus PLAN YOUR WAY TO PEACE OF MIND NOTES FROM THE EDITOR
VOL. 48 : FEBRUARY 2011
The Professional Advisory
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The Professional Advisory consists of a group of seven independent professionals who provide services to the dental profession, each of who specializes in a different eld. They have gathered to keep each other informed of the latest developments relating to the profession, and to produce this publication which is designed to provide expert information and advice solely for dentists and their advisors.
Plan Your Way To Peace Of Mind RALPH CRAWFORD BA., DMD In an October 2010 issue of the Vancouver Sun there appeared an excellent eight page supplement titled The Art of Retirement. The supplement contained numerous articles on retirement with enticing titles and sub headings: Retirement planning, What are you up to now, The importantance of preparing, The new normal, Advice from a veteran investment manager and Pension “envy” requires reform. Any one of the supplement’s articles contained some advice worthy of the attention of private practice dentists dealing with today’s success and tomorrow’s retirement. But the one headline that really grabbed my attention was titled Plan Your Way to Peace of Mind, written by journalist Vito Cupoli. Within his short article Mr. Cupoli quoted several pieces of advice from Janice Margolis, president of the Estate Planning Council of Vancouver - advice that applies to all phases of life, not just estate planning. Among her words of wisdom were: Examining values and setting priorities and, First, what do you need in your lifetime while working? Reflecting on this particular publication - and all publications of The Professional Advisory - it is easy to see that planning your way to peace of mind is what each PA contributor has set as a goal for today’s dentists. Take Graham Tuck’s piece, Overpaid Long Term Staff, and the inherent difficulties it poses when selling a practice. One of the ways to gain peace of mind and avoid potential problems is being informed of the pay standards in your community and that remuneration can take different forms. Ian Toms makes it clear that lack of planning leads to Renewal of
the Lease Refused when he states, “The original sin always lies with the tenants. Tenants forget or simply don’t bother to manage (plan!) lease affairs.” And how close can you get to peace of mind in today’s life insurance issues than to follow Ian Wexler’s advice, Review Your Life Insurance NOW - with the emphasis on the NOW. David Rosenthal’s Associate Agreements is all about planning “a number of issues to consider when hiring an associate dentist” and his guidance certainly falls within Janice Margolis’ advice of examining values and setting priorities. Here’s a decision: Salaries vs. Dividends. What’s Best? Step by step David Chong Yen leads the reader to peace of mind with his analysis of salary and dividend rates of return over various time spans. One of the definitions of paralysis is the “inability to act” and with his analysis of dramatic market changes Mark McNulty helps all of us attain peace of mind as he outlines that the “next time the markets turn negative don’t let a case of Investor Paralysis - inability to act hamper your portfolio’s returns.” And what better way to plan for peace of mind than to strive for what Ron Weintraub calls A Dynamic for Effective Communication because it is this effective communication that is “Essential to continuing an excellent relationship between generalists and specialists.” The practice of dentistry holds numerous elements that left unplanned can cause stress and anxiety. Take those addressed within these pages - salaries/ dividends, overpaid staff, associate agreements, lease renewals, practitioner interaction, life insurance, investments - any and all can contribute to hardship. But the good news is that fundamental and implicit within each article there is advice and guidance to help you Plan Your Way to Peace of Mind. PA
crawford@dccnet.com
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Salaries vs. Dividends. What’s Best? DAVID CHONG YEN CFP, CA www. dcy.ca
There has been much controversy as to whether one should pay themselves a salary from their professional corporation (PC) or pay no salaries and instead pay only dividends. Where one receives no salaries, they should consider the following consequences: 1. They will not be eligible to contribute further into CPP and to possibly increase CPP benefits upon retirement. 2. They will likely not be able to deduct child care expenses if they are the lower income spouse. 3. They will not be an employee and therefore cannot have a death benefit paid to their loved one upon their passing. Death benefits up to $10,000 can be received tax free. This amount would also be tax deductible to the PC. 4. As they will not be an employee, they cannot contribute to an Individual Pension Plan (IPP) or Retirement Compensation Arrangement (RCA). Much of the analysis promoting dividends only may have ignored the following issues: 1. Analysis assumed that the PC can be owned by a holding company. This is not permitted by the Royal College of Dental Surgeons of Ontario. 2. Analysis may have assumed that if one had RRSP’s, then all of the RRSP proceeds would be taxed at once. In most instances this is not the case as monies can be transferred to a RRIF and taken out over time, hence resulting in a tax deferral and likely also tax savings. 3. Analysis ignored the fact that the PC, especially in the case of a dentist, is quite valuable. This analysis has also ignored the issue of claiming the capital gains exemption (CGE) and the negative impact that surplus cash/investments within a PC has on claiming the CGE.
Our analysis assumed the following: 1. DDS/DMD is the sole shareholder of the PC. 2. Corporate taxable income before DDS/DMD salary is $360,000 3. To obtain an annual after-tax cash flow of approximately $74,000, total salaries withdrawn should be $130,000 vs. dividends of $83,772. 4. CPP contribution - $4,326 per year 5. RRSP contribution - $22,000 per year 6. Rate of return on investments is 3.0 per cent or 5.0 per cent. 7. Remaining years of practice is 10, 20, or 30 years and the dental practice will be subsequently sold for $1 million. 8. DDS/DMD will sell shares of the PC and claim the capital gains exemption of $750,000 CPP and OAS benefits are assumed to be at maximum, and DDS/DMD is to receive these benefits for 20 years following retirement at age 65. 9. RRSP is transferred into RRIF and DDS/DMD receives annual income installments from the RRIF beginning at age 65 until age 85. 10. All investment income is realized and 100 per cent taxable. 11. EHT was not considered.
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Conclusions of our analysis are as follows: Rate of Return: 3% Salaries Dividends Difference Rate of Return: 5% Salaries Dividends Difference
($000’s)
($000’s)
($000’s)
10 Years 20 Years 30 Years $2,722 $3,829 $4,521 2,676 3,759 4,377 $46 $70 $144 10 Years 20 Years 30 Years $2,351 $2,978 $3,206 2,327 2,902 3,025 $24 $76 $181
Salaries yield better results in all the above cases versus dividends. Due to the recent decreasing corporate tax rates, the argument does make dividends more attractive today than they were in the past when the corporate tax rates were higher. However, the following issues should also be considered:
Contributing to an RRSP is a form of forced savings. Many clients, dentists in particular, if they are not forced to save, end up saving NIL. As opposed to having all the eggs concentrated inside the PC, these eggs are spread out and diversification is obtained, i.e., spreading eggs into different baskets, which payment of salaries facilitates. What is Best? If you do not believe in RRSP’s, IPP’s or RCA’s, are disciplined and can save even if not forced to do so, then consider the dividend only strategy. Otherwise, salaries may be the suitable alternative. PA
David Chong Yen, CFP, CA of DCY Professional Corporation Chartered Accountants is a tax specialist and has been advising dentists for decades. Additional information can be obtained by phone (416) 510-0888,fax (416) 510-2699,or e-maildavid@dcy.ca,www.dcy.ca. This article does not replace professional advice.
Overpaid Long Term Staff GRAHAM TUCK H.B.A., C.A. www. ppsales.com
Following up from my last article, A Potential Pitfall of Selling Shares in Professional Advisory #46, there are other situations that can be very detrimental to your expectations of the net realizable value of your practice. This next potential problem is overpaid long term staff. You have seen the effect. It is review time and your long term staff member gets her raise of let us say, $1.50 per hour. Sounds innocent enough? So now she is getting $38.00 per hour. She is your assistant, is 55 years old, and has been with you for 30 years and works 40 hours per week and your billings are about $800,000. You are now anticipating selling your practice. Do you think that a purchaser would want to hire this person if they were to purchase your practice? I am afraid not!!
So the purchaser wants to purchase your practice but not hire the assistant. She now becomes your problem to terminate. How bad can that be? Statutory law would be one weeks pay per year of employment to a maximum of eight weeks. This would be $12,160. High enough but it could be worse. The common law could require you much greater termination pay than the Statutory minimum. Generally speaking such termination pay could equal one month of pay per year of service, although there is typically a cap of about one year total termination pay but not always. If she sues for wrongful dismissal, under common law it becomes a legal matter. Capped at one year, it would cost about $78,000. Uncapped it could cost $196,000. This is for only one employee. If your entire team is paid well over the standard remuneration for your dental community, your practice may not be salable. How to avoid this problem? 1. Become informed about the standards of pay in your community. 2. Let your staff know this pay range. 3. Remuneration can take different forms, i.e., gifts, outside training (team trips)
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Once you have the problem you can: 1. Negotiate to pay the employee a lump sum payment to reduce their salary. But even this has its problems. Negotiation without compensation to the employee would probably not stand up in court. Negotiation without the employee being given an opportunity to consult a lawyer would probably not stand up in court either. 2. A reduction in pay could be construed constructive dismissal and this again could become a legal situation. 3. Give the employee a years working notice. The employee is put on notice that at the end of the one year period, her salary is being reduced, and if she does not agree then her employment is terminated at the end of the one year period. This should reduce your exposure but then you could lose that employee if they find another job and it would put off the sale for the year.
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This is a tricky area. Consult your labour lawyer before you make any attempt to solve your problem. The sale could go forward if the Vendor agrees in the sale agreement that the Vendor remains liable for her termination pay for an extended time period if the Purchaser terminates her after closing. Another remedy could be that the Purchaser puts into the sale agreement that the deal is conditional upon the employee agreeing to reduced pay, failing which the Vendor must terminate her at the Vendor’s cost. As you can see, overpaying staff limits your net income on a year over year basis and even the net value of your practice when you sell it. PA Graham Tuck, H.B.A., C.A. is the broker/owner of Professional Practice Sales (Ontario) Ltd., which specializes in the valuation and sales of dental practices. He can be reached at (905) 472-6000 or 1-888-777-8825 or e-mail at: grtuck@rogers.com
Associate Agreements Part 1 DAVID ROSENTHAL BA., LL.B. There are a number of issues to consider when hiring an associate dentist. An associate agreement is the legal contract that details the arrangements between the dentist who owns the practice (Principal) and the associate dentist (Associate) hired to work at the practice. This article is part 1 of 2 which considers some of those issues from the Principal’s perspective. A written agreement between the parties is critical to protect the Principal’s interests and deal with the many issues that should be clearly set out in writing. Many principals do not enter into written associate agreements to document this important relationship, and they do so at their peril. While a verbal agreement may be legally enforceable, it is not sufficient.
Relationship - In almost all situations the Associate works at the Principal’s dental practice as an independent practitioner. Principals and/or Associates can be individual dentists or dentistry professional corporations. This article does not deal with dentistry professional corporations. But there may be many potential tax benefits so it is always worthwhile to contact with your tax advisors to determine whether to use
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a professional corporation as the Principal. As an independent practitioner the Associate is operating his or her own separate business and is self employed. The Principal pays the Associate a gross amount and the Associate must then remit from that gross amount the required taxes to Canada Revenue Agency (CRA). The Agreement needs to clearly specify the independent contractor relationship between Principal and Associate. In my experience very few dentists treat their Associates as employees. Most Agreements specifically state the Associate is not an employee and will personally pay all taxes and satisfy all other governmental requirements. However, simply making that statement in the Agreement is not sufficient. The relationship of Principal and Associate will be determined based on what the actual facts show the relationship to be, not just what the words in the Agreement say. CRA may audit and assess the Principal on the basis that their Associate was, in fact, an employee. If CRA were successful the Principal would be responsible for the statutory deductions the Principal failed to make as an employer, such as income tax, Canada Pension Plan and Employment Insurance. In addition there could be penalties and interest. There are several factors that CRA will examine in determining the relationship of Principal and Associate and whether is it an independent contractor or employer/employee relationship. 1. Control - does the Principal have control over the patient lists, the hours of work, the nature and quality of work and the right to hire and fire? 2. Ownership - who owns and supplies the equipment and instruments required by the Associate and who bears the costs related to their use? 3. Chance of profit/risk of loss - who assumes the financial risk? Is the Associate entitled to his/her full percentage or remuneration regardless of the financial health of the practice? 4. Integration - this matter is considered from the Associate’s point of view, not the Principal. Is the Associate acting on behalf of the employer, connected with the employer’s practice in all aspects and dependent on the employer’s practice? Where the Associate truly integrates his or her activities to the activities of the Principal, an employer-employee relationship may exist. Likely some Principal/Associate arrangements could be classified and treated by CRA as employer/employee
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relationships. This makes a properly drafted Agreement, which reflects the Associate as an independent contractor, extremely important from the Principal’s perspective and for the Principal’s protection. The Agreement should detail what the Associate as an independent practitioner is responsible to pay for, including licences, memberships, insurance, educational courses, seminars, and other expenses applicable to the Associate.
Most Agreements specifically state the Associate is not an employee... However, simply making that statement in the Agreement is not sufficient. The relationship of Principal and Associate will be determined based on what the actual facts show the relationship to be, not just what the words in the Agreement say. The Agreement should detail all services and facilities the Principal will provide to the Associate, including the use of the premises, equipment, dental supplies, staff and services. Staff and services might include receptionists, chairside assistants, dental hygienists, management, administrative, bookkeeping and collection services. If special equipment or specific staff is required (such as a designated operatory or designated chairside assistant or hygienist) this should be detailed in the Agreement. Often the Agreement provides the Principal will provide the ‘standard’ equipment and ‘routine’ dental supplies and it is the Associate’s cost if the Associate requires further specialized items. Part 2 of this article will continue in the next volume of The Professional Advisory and address Associate remuneration, non-competition covenants and termination of the Agreement. PA David Rosenthal is a senior lawyer with Spiegel Rosenthal Professional Corporation whose practice is devoted to corporate, commercial and business law, with special emphasis on advising and consulting for the dental profession. He can be reached at (416) 865-0736; or fax to (416) 203-8592; or e-mail to david@drlaw.ca.
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Investor Paralysis 2.0 MARK McNULTY BA, CFP, CIM
is to say that since we first ran the numbers back in early 2009, some of the poorer performing mutual funds have been closed and/or merged into other funds and therefore their performance history will not be included in our new search.
www.yournumber.ca
In the April 2009 Professional Advisory issue I wrote an article called Investor Paralysis. It was about four different dentists (new referrals) who, on average, were down more than 40 per cent on their retirement portfolios. Their average age was over 54 years old. The crash in 2008 gave them each a severe case of what I call “Investor Paralysis.” They didn’t want to make any changes. Instead, they just wanted to hold on with the hope their portfolios would rebound. As stated in that article, it was as if these four dentists had decided to reward poor performance by sticking with their current manager! Some investors seem to forget that not all mutual funds or investment advisors are created equal. Managers with a long reputation of being an under-performer are unlikely to shake that reputation in the future. For this article I thought that it might be interesting if my team and I went back and re-tested my assertion that mutual funds with histories of underperforming in the past are likely to keep underperforming in the future. The Method To test this assertion we went back to the Morningstar Database - the investment fund research firm - but this time we narrowed our search and looked only at the Canadian Focus Equity funds. Then we eliminated any fund that had been closed to new investors, had prohibitively high minimum initial investment amounts or did not have at least seven years of performance history. We chose seven years because it has been almost two years since the market started to recover, so two years ago all the funds in our universe would have had a five year track record and typically we do not look at funds that do not have at least five years of performance history. After we refined our search, as described above, our fund universe shrank by about 64 per cent. One thing however we cannot account for is survivorship bias which
From the fund set, as described above, we ran performance numbers from November 30, 2003 until May 31, 2008 and we pulled out the five best and five worst performing funds over that period. Then we determined the average return over the period for both the five best performing funds and the five worst performing funds. After we found the average return for the five best and five worst performing mutual funds before the Canadian equity market crashed in June of 2008, we then wanted to find out how our best and worst performing funds performed after the crash.
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The Result If our April 2009 assertion was correct, then generally speaking, the worst performing funds before the crash were likely to be some of the worst performing funds after the crash and similarly the best performing funds remain the best performing after the crash. So what did we find out? Over the pre-crash period the five worst performing funds on average underperformed the five best performing funds on average by 2.5 per cent per month! That is some significant underperformance. Over the post-crash period they still underperformed the top performers by over 1.3 per cent per month! Again that is some very significant underperformance. In the April 2009 issue I argued that people should take the opportunity to fire managers who had underperformed. Managers with a history of under performance are not likely to beat those with a long
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history of better performance. Since then, and since the stock market recovered, our research shows that this is true. The worst performing funds leading up to the crash have continued to underperform the best performing managers by over 1.3 per cent per month (up until November 30, 2010)…as have those dentists with Investor Paralysis. So next time the markets turn negative, don’t let a case of Investor Paralysis hamper your portfolio’s returns. PA Commissions, trailing commissions, management fees and expenses all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Mr. Mark McNulty BA, CFP, CIM, is a nancial advisor with Raymond James Ltd., Independent Financial Services - Member CIPF. This article is for information only. Its opinions are those of the author, not necessarily those of Raymond James Ltd. He may be contacted at 905-470-6222ext 209 or mark.mcnulty@raymondjames.ca.
Review Your Life Insurance NOW! DR. IAN WEXLER www.protect-ins.com
Life insurance rates are going up across the industry! If you are hearing this for the first time, I would be very concerned, as you may already have missed significant deadlines and opportunities for making changes to your life insurance portfolio that will now cost you significantly higher premiums in the future. When did this start? The first shot was fired by Manulife Financial in October 2010, when they gave two months notice regarding their plan to raise certain permanent life insurance rates as of December 4, 2010 by an average of 10 per cent. Since beginning this article in mid-December, several other companies have indicated that they are raising their rates for similar life insurance plans for the same reasons. They are Industrial Alliance (IA), Empire Life, and Sun Life.
IA indicated that their premium increases would take effect January 17, 2011, for Sun Life January 29th, while Empire indicated that their premiums will be increasing in the first quarter of 2011. Since all four of these company’s moves to increase life insurance premiums, it is widely agreed within the life insurance industry, that it is just a matter of time before the rest of the major life insurers follow suit. Michel Fortin, vice-president for retail markets at Standard Life, says “industry data has shown for years that premiums for permanent life insurance products were not reflecting the reality of the market, especially in the context of low interest rates.” In the past, insurance companies customarily gave brokers at least a month’s advance warning of pending rate increases; however, those days are long gone. Recent events have seen companies shorten their notice time to one month at best, or even to give no notice or warning at all. Are all life insurance plans affected by these increases? As of the writing of this article, the primary life insurance plans affected are permanent life plans with built-in premium guarantees. Permanent plans include:
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• Term to 100 • Universal Life including level pay and quick pay plans • Non-participating Whole Life It may be hard to believe, but Canada is really the only market where these long term guaranteed products still exist. Many in the life insurance industry believe that guaranteed permanent products, such a Term 100, will continue to experience dramatic rate increases. Some even hold that in the not too distant future, guaranteed “plain vanilla” permanent plans will no longer be available for either a term conversion or a new purchase. This will leave anyone waiting to convert with fewer and significantly costlier permanent life insurance options such as whole life.
In the past, insurance companies customarily gave brokers at least a month’s advance warning of pending rate increases; however, those days are long gone. Recent events have seen companies shorten their notice time to one month at best, or even to give no notice or warning at all. Why is this happening? Manulife has indicated that “insurance companies price their level cost of insurance rates using a number of assumptions, including interest rates, mortality and expenses. As you know, interest rates are at historically low levels and the current level cost of insurance rates are no longer sustainable at these low interest rates. “ How will this affect your current and future life insurance planning? If you currently hold term insurance, your rates are guaranteed unless your plan is through the Canadian Dentists’ Insurance Program (CDIP) which is distributed through CDSPI. Most private individual term plans are convertible to some form of a company’s permanent insurance products (without medical proof ). This option is not available with the CDIP term plans. Many individuals choose “term” life coverage as a way of economizing on premiums in the short time, with intention of “converting some or all of their coverage to
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permanent insurance down the road.” Term life insurance generally helps individuals with “short term” needs including: • debt repayment • childcare and education costs With term coverage, there is no cash value, and premiums increase dramatically at the end of the term (usually 10 or 20 years). If you continue to renew your term coverage, the cost becomes astronomical in later years and the plan eventually ceases at age 85. Essentially, you may have paid significant dollars having “rented” this coverage, with NO payout for your family at the end. Permanent life insurance is coverage that NEVER expires as long as premiums, which are fixed and guaranteed, are paid. It is far less costly over the long term compared to term coverage and is chosen by most of our clients for some or all of their life insurance needs for the following reasons: • Spousal and family income • Estate taxes (e.g., cottage and other assets) • Help your children (and grandchildren) start their adult lives and careers • Compensate for the “unknown” future value and sale of your practice/business • Help look after elderly parents • As part of an excellent retirement income planning strategy referred to as an Insured Annuity which can provide a pre tax guaranteed yield of approximately 7 to 10 per cent on your retirement assets. What are your best options for moving forward? 1. Meet with an “independent” life insurance specialist who will review your current coverage, analyse your specific family and practice life insurance needs, and make the appropriate recommendations to suit your budget ASAP. 2. Consider purchasing guaranteed permanent life insurance or converting your current term life plan now…before premiums increase any further! 3. If your current advisor has not contacted you about these important issues, it may be time to consider choosing another advisor! PA Dr. Ian Wexler is a leading authority on insurance issues for dentists. He is the founder and President of Protect Insurance Agencies Inc. in Toronto which has provided specialized expertise in life, disability, critical illness, long term care, and other insurance products and services to professionals, executives, and business owners across Ontario for over 16 years. He can be reached for questions or other enquiries at (416) 391-3764 or drwex@protect-ins.com
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Renewal of the Lease Refused IAN D. TOMS B.Sc. (Hons) www. iantoms.com
Here we go again. Another tenant calls and a familiar story emerges. The tenant has just realized that its lease has ended, and has a matter of weeks to find, lease, build and move to alternate premises at a cost of hundreds of thousands of dollars. Incredibly, many tenants actually confess that they have known for a period of years that their lease term would not be renewed but deferred action to correct the problem until the eleventh hour, hoping that by some miracle the matter would take care of itself. As the conversation progresses three horribly familiar questions emerge. Who is to blame for this mess? What is the way out? And how on earth can this problem be avoided in the future? On the first question, the original sin always lies with the tenant. Tenants forget or simply don’t bother to manage lease affairs. As a result the tenancy abruptly ends, despite the fact that the tenant has been flirting with disaster for years. The answer to the second question is remarkably simple. Either the lease can be resurrected, or the tenant must move. Resurrecting a dead lease is always a long shot, but worth a try. If you have to move, then immediately secure alternate premises on acceptable terms. And how can you avoid this disaster? Your “lease term plus renewal option minus any early termination rights” equals the period of time you have of control of both your premises, and value of your leasehold improvements. You must always know this time span. In Ontario a “lease term plus renewal option” aggregate longer than 21 years is treated as a sale and not a lease for purposes of the Planning Act, and therefore lease arrangements longer than 21 years are not common. Further, both landlords and tenants should be reluctant to commit to lease arrangements for longer than 20 years because circumstances will likely be
very different that far into the future. But 20 years is shorter than most dentist’s careers and practice life spans, regardless of who is practicing at the premises. Ideally, aim to always maintain a forward event horizon of 15 to 20 years. Implement your plan in two phases. First, during the initial lease negotiation, break the tenancy into an “initial term plus renewal options” which provide periodic opportunities to adjust tenancy matters, at your option, for the next 20 years. A common formula is a five year term, plus three renewal options of five years each. Progressively add a renewal option to replace the current renewal option to always maintain the 20 year forward event horizon. Your first sign of trouble will be when landlord refuses to grant a replacement option to renew. Plan to leave at the end of the remaining term plus option period. Know that an option or a right to renew provides you with the ability to take advantage of the renewal opportunity if conditions are favourable to you. Recognize and use this opportunity to your advantage!
Resurrecting a dead lease is always a long shot, but worth a try. If you have to move, then immediately secure alternate premises on acceptable terms. For illustration purposes, consider the lease term renewal document shown below. Formally educated tenant Sir Thomas Tempest (1642-1691) exercised his right (fifth word) to renew the term of his lease for a period of three lives (210 years). It’s likely landlord would not have been eager to renew the lease because the landlord was the Anglican Bishop of Durham. During the tenancy Sir Tempest had converted from an Anglican to a Roman Catholic to accommodate a marital circumstance and was openly charged with absenting himself from the Anglican parish church. Therefore, Sir Thomas Tempest managed his tenancy by exercising his right to renew and forced the landlord to renew the term of his lease.
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tenant need to take responsibility for your lease affairs. First, hire a professional to review your existing lease, or negotiate a new lease. Make sure your lease term plus renewal option minus early termination provision is a reasonable event horizon. Second, make sure you clearly understand how your options to renew work, and how you should administer them. Plan a premises time line strategy based on your understanding that corresponds to your career plan. Third, administer your renewal options properly by delegating responsibility to a competent professional. Do not risk your tenancy to save a few dollars in fees. A properly drafted renewal provision together with a competent negotiation will save you far more than the professional’s fees. If you do not follow these recommendations and find yourself without a long advance period of premises control, please, face your problem sooner rather than later. Look forward to relocating and look for the opportunity in the move. PA
(text is available at iantoms.com in the “Resources” section)
Follow the example set by Sir Tempest. Be proactive. Do not risk your investment in your practice. You as a
Mr. Toms has been creating and preserving realty leasehold value since 1986 and can be reached at (705) 743-1220, by e-mail at iantoms@ pipcom.com, or through his web site at: www.iantoms.com.
A Dynamic For Effective Communication Traditional vs. Modern Inter-Practitioner Relationships General practitioners, specialists, and the public have viewed their relationship in a fairly straight forward manner. Usually, they concurred that specialists accepted referrals from generalists’ offices for DR. RON WEINTRAUB treatment that was deemed beyond the scope of ability www.innovativepracticesolutions.ca or desire to treat at the referring office. Specialists Dentistry today includes many sophisticated consulted with patients and occasionally included the procedures historically not offered in general referring practitioner in treatment planning. After practitioners’ offices. With the reality of advanced consultation, the specialist usually sent a detailed techniques currently promoting unprecedented letter to the referring office outlining the findings and levels of care, we need to review dental practitioners’ completion of treatment. Sometimes future treatment relationships and responsibilities. was discussed or recommended.
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This model remained in place for many years when many treatment modalities were considered almost exclusively in the realm of certified specialists. In contrast to the traditional relationship, GPs today appreciate being informed of the treatment and given the option of doing the treatment. Previously, they had less motivation professionally and financially for involvement in more complex and time-consuming procedures. Currently, an explosion of postgraduate courses offer varied opportunities for hands-on clinical training for general dentists to increase their knowledge in areas previously left to specialists. For patients, their GPs’ additional knowledge has the advantage of allowing them access to care in their family dentist’s office. It also has advantages for GPs in that increased public awareness and appreciation of the value of biologic and aesthetic oral health increases the demand for more esoteric services. This increase has corresponded to the decreased demand for basic dentistry partly because of the successful preventive measures initiated by the profession. In response to the decline for some basic services, many practitioners have heightened their interest in expanding their treatment offerings. Specialists and General Practitioners’ Views and Responsibilities Possibly, the most dramatic area of change was in periodontics where specialty offices offered first stage sanative therapy, often performed by similarly trained hygienists in many GP practices. The perceived added advantage of introducing soft tissue management protocols delivered mostly by the hygiene department is that it can be delivered with little dental clinical supervision. This motivation, however, may be problematic because it places too much treatment responsibility with the hygienist and precludes direct clinical input by the dentist. Periodontists sometimes feel they are consulted only in the late stages of the disease process, which could compromise clinical results. In post surgical periodontal treatment, it is often the periodontal office that provides continuing recall maintenance resulting in some GPs feeling they are denied opportunities to manage post care in their hygiene department. The policy differences can ensue with the potential patient as the loser. A philosophic discussion between referrer and referee would resolve the uncertainty with patients’ best interests served. Endodontists’ and referring GPs’ interaction also requires effective communication. The advent of various rotary endodontic systems designed for specialists and
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GPs coupled with the attendant ubiquitous courses manufacturers offer encourages generalists to initiate treatment on difficult cases. Some GPs think of their specialist counterparts as the line of last resort to retreat their endodontic failures. This thinking sometimes results in patients’ loss of confidence in their dentist. Although it is heartening to observe endodontic expertise increasing in many generalists’ offices, the golden rule remains--case selection reigns supreme. Oral and maxilla-facial surgery is another specialty that can have a significant overlap with GP offices. With increasing knowledge and a plethora of manufacturers’ courses, many generalists have become quite proficient at placing implant fixtures in areas where bone density and sinus lifts are not an issue. Once again, case selection is paramount to ensure that dentists do not get into treatment beyond their capability. Orthodontics is not immune from new realities. Orthodontic specialty associations and groups recently advertised directly to the public. These advertisements could be misconstrued as suggesting that certified orthodontists may be the only safe source to which the mechanical movement of teeth should be trusted. The availability of continuing education courses that include the use of Invisalign and bracketed cases has allowed some offices to offer competent in-house orthodontic services. These public services afford dentists with rural and outlying practices an opportunity to provide a previously unattainable service because of cost and distance for their patients. Effective Communication Between Professionals Essential to continuing an excellent relationship between generalists and specialists is open communication. An important part of their interactions is to understand each other’s limitations. In addition, willingness for specialists to act as clinical mentors helps general practitioners avoid treatment beyond their competence. In addition to keeping the doors of communication open, another strategy to achieve a responsible relationship between two professionals is by reviewing patients’ primary interest and agreeing to treat them as the primary focus. The dynamics of effective communication engenders respect for both offices and is a prescription for continuing successful professional collaboration. PA Ron Weintraub is a founding partner with the Bayview Village & Downtown Dental Associates and brings over thirty-ve years of knowledge and experience in the practice of general dentistry to the Professional Advisory. Large companies such as Patterson Dental, Ash Temple Ltd, Henry Schein Arcona, & the former Canadian Dental Co. have beneted from his insight. As owner of Innovative Practice Solutions, Ron advises dentists on practice enhancement, practice purchases, sales, location evaluations, associate buy-ins, and business mergers. Dr. Weintraub can be contacted at (905) 470-6222 Ext. 221 or drronips@rogers.com.
The views expressed in any article are those of the author alone. They should not be acted upon without the advice of your “professional advisors”.