Medical Office Searches

On this page

1. Establish What Is Actually Owned
2. The Condominium Layer
3. Equipment, Fixtures and Who Financed Them
4. What the Record Will Not Tell You
5. Ordering the Search

Establish What Is Actually Owned

The first question on any medical property is which of several possible structures you are looking at, because they lead to entirely different searches.

A great many clinics occupy a condominium unit in a medical office building, held subject to a recorded declaration with assessments, rules and a shared common element. Others sit in a freestanding building on their own parcel, which behaves like ordinary commercial real estate. A third group leases the space entirely, in which case there is no real property to search and the diligence moves to the lease.

A fourth arrangement is common enough to mention. The practice entity operates the clinic while a separate holding entity owns the real estate, frequently with overlapping but not identical ownership. Searching the practice name alone will miss everything recorded against the holding entity, and the reverse is equally true.

The Condominium Layer

Where the space is a unit, the declaration governs more than most buyers expect and it is recorded in full.

• Assessment obligations, which become liens on the unit if unpaid and in many states take a limited priority over an existing mortgage.
• Use restrictions that may limit which specialties can occupy a unit, frequently to protect an existing tenant from competition.
• Parking allocation, which on a medical building is a genuine operating constraint rather than a formality, and is often assigned separately from the unit.
• Common element definitions that decide who maintains what, including corridors, elevators and mechanical systems.
• Alteration approval requirements, which matter because medical build outs are extensive and recurring.

Reading the declaration and every amendment matters more here than in a residential condominium, because a use restriction recorded in 1998 can prevent the intended practice from operating at all. A condominium and HOA title search covers the recorded side of that picture.

Equipment, Fixtures and Who Financed Them

The build out is frequently worth more than the shell that contains it, and a large share of it was financed by somebody other than the mortgage lender.

Imaging systems, treatment chairs, sterilizers, lasers, specialized plumbing and lead-lined walls are all routinely vendor financed. Where that financing was perfected as a fixture filing recorded at the county rather than as an ordinary UCC filing with the state, it attaches to the real property, and a fixture filing recorded before a mortgage can take priority over it.

That is the single most consequential item on a medical property search and it is invisible unless somebody looks for it specifically. The analysis is set out in UCC fixture filings, which deals with the same mechanism in a different setting.

What the Record Will Not Tell You

A substantial amount, and on a practice acquisition most of the value sits in it.

Licensing and credentialing, payer contracts and their assignability, accreditation status, and whether a certificate of need applies to the service being provided are all regulatory matters held well away from the recorder. So is whether the space meets current accessibility and infection control standards.

Leases are almost never recorded. Where a clinic rents, the lease term, assignment rights and any landlord consent requirement are the governing documents, and the landlord's consent is reliably the slowest item in a transaction.

Ordering the Search

Send us the address, the county, the unit number where one applies, and every name the property may be held under, including the practice entity, any holding entity, every former name after a merger, and the selling practitioner personally. A judgment against an individual physician can reach a building held in their own name.

A full chain of title search with a judgment and lien search against all of those names is the usual scope. Ask specifically for fixture filings rather than assuming a standard search covers them.

A title search reports what was recorded and found in the indexes reviewed, as of the day the work was done. It does not report licensing, payer contracts, equipment ownership outside the record, or what a practice is worth. See all search products, or tell us the entity names and we will scope it before anything is ordered.

A former bank branch converted to clinical space raises one more question, because the deed may carry a recorded restriction of the kind covered in the bank branch and credit union search.