Crafting the Perfect Lease for Your Assisted Living Facility
Feb 17, 2025
If you're planning to rent or lease an assisted living facility, you need the right lease agreement in place. A good lease makes sure everyone is on the same page—from how much rent is due to who fixes the leaky faucet!
This guide will break it all down in a simple, easy-to-understand way so you can create a lease that protects both the property owner and the operator while keeping your business running smoothly.
Check out the video, too:
What Is a Lease Agreement?
A lease agreement is a legal contract between:
๐ The Landlord – Owns the property and rents it out.
๐จ๐ผ The Operator – Runs the assisted living business inside the property.
This lease covers more than just rent—it also includes insurance, maintenance rules, and state compliance requirements. Think of it as a rulebook for how the property and business should work together.
Why Do You Need a Lease Agreement?
A lease is more than just paperwork—it helps keep everything clear and protects both parties from misunderstandings.
โ
Legal Protection – Makes sure both sides follow state rules.
โ
Financial Stability – Ensures rent is paid on time (which is extra important if the landlord has an SBA loan!).
โ
Clear Responsibilities – Decides who fixes what and who pays for repairs.
Even if you own both the property and the business, a lease between your two entities adds legal protection and makes tax reporting easier.
Who Creates the Lease Agreement?
๐น Usually, the landlord drafts the lease, and the operator reviews it.
๐น Sometimes, the operator creates the lease if they have special requests.
๐น An attorney should always review it to make sure it's legally sound.
Key Parts of an Assisted Living Lease Agreement
Here are some important things to include in your lease:
๐ Insurance Requirements – Who pays for property insurance, liability insurance, and workers' compensation?
๐ State Compliance – The lease must follow state laws and assisted living regulations.
๐ Rent & Rate Adjustments – If the landlord’s loan has an adjustable rate, how will the rent be affected?
๐ Maintenance Responsibilities – Who takes care of repairs and property upkeep?
๐ Operational Rules – Includes staffing requirements and resident care standards.
๐ Signatures & Notary – Some states require leases to be notarized—double-check yours!
Tips for Operators Reviewing a Lease
Before signing, make sure you:
๐ Read Every Word – Don’t skim! Every clause matters.
โ๏ธ Consult an Attorney – A legal expert can make sure you’re protected.
๐ Negotiate Terms – If something doesn’t work for your business, ask for changes!
๐ก Bonus Tip: Grab our Free Sample Lease Agreement to help you get started!
Steps to Create a Lease Agreement
1๏ธโฃ Define the Relationship – Outline what both parties expect.
2๏ธโฃ Draft the Agreement – Use a sample lease as a guide.
3๏ธโฃ Consult Professionals – Have a lawyer review everything.
4๏ธโฃ Review and Sign – Both parties should agree before signing.
5๏ธโฃ Keep a Copy – Store it safely for future reference.
Final Thoughts
A strong lease is the foundation of a great partnership between a landlord and an assisted living operator. It ensures everything runs smoothly and protects everyone involved.
If you’re just getting started, download our FREE sample lease agreement to see what yours should include. And always check with a lawyer to ensure your lease follows state rules!
๐ก Need more help? Reach out to us for expert guidance on leasing your assisted living facility!
Next steps?
Ready to take the next step in your assisted living journey? Download our Business Plan Checklist to ensure you have all the elements needed for a successful business plan. This tool will help you outline your business strategy, identify key goals, and prepare for a profitable venture.
Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.
Show full transcript ๐
Transcript
00:00:00
hey friend I'm Brandon Gustafson I help beginners like you launch their Assisted Living business in the next 12 months in today's video we're going to be getting into how to create a lease agreement with an operator for your assisted living facility if you're interested in that make sure you stick around for today's [Music] video hey friend welcome back to the channel before we get started on today's video I want to remind you to get over to the website and get access to our
00:00:27
free underwriting calculator it's going to help you make some progress and and create your own Assisted Living business it's one of those first steps so make sure you go and grab that free resource for today's video we're going to be getting into the topic of how to create a lease agreement with an operator for an assisted living facility this is a a question that I see often especially for those that are interested in leasing out their home because they just don't know how to do this you know it's a little
00:00:53
bit of a weird dynamic and and they want to figure this out and so if this is you and you're you're one of those landlords that need some help I'm creating this video a little bit more for you geared around that so you know how to create that that lease agreement with the operator if you're the operator though make sure that you stick around as well so you kind of understand what this lease agreement is going to look like for you as you are trying to get in and find somebody that you can lease it from
00:01:16
and what I would love to do is if you can comment down below if you're a landlord or an operator that's going to allow people to to maybe do some connecting um just here down in the comments on YouTube and help you find some of those people maybe put landlord or operator and then just the state where you're at and that that way you can kind of do some connecting and some networking I hope we're able to kind of create something that that's going to work beneficially for both of you and
00:01:41
create something that that's going to work for everybody so with all of that out of the way let's get into the topic for today's video so what is a lease agreement a lease agreement is something that's very similar you're going to see this in real estate often so if you have ever rented a house from somebody just a single family home you're going to know that you're going to have a lease agreement there that lease agreement is just it's a legal document it kind of
00:02:02
gives a frame for you as the the person that is leasing that's renting from somebody you know I agree to these rules I I curfew or you know noise restrictions or whatever it is that's put into the the lease agreement and as a landlord I'm going to provide you with the home and make sure that it's kept up and and everything like that that's exactly what this lease agreement is going to look like in Assisted Living so you just have this agreement between two parties this could be a landlord and an
00:02:29
operator or it could be the scenario where you own the facility and the business and you're leasing from them in that scenario you're still going to need to have some kind of a lease agreement to give you some added protection when you're doing that and I think I've got a video that I've talked about this just kind of like my legal structure on on things but we have an entity that owns the real estate an entity that operates the business there's a lease agreement between those two and the operating
00:02:53
entity is going to pay the landlord for that debt service that then that landlord is paying to the bank for The Debt Service that we have with the SBA loan so you can do this internally for yourself and creating something that's really simple is going to benefit you actually we're going to put a free resource down below that's a a sample lease agreement so you can see exactly what that looks like so make sure you go and grab that because it's going to help you out through this process as you're
00:03:16
creating that lease agreement essentially though you're creating this agreement between the two parties one's agreeing to pay the other for access to the home essentially so whatever scenario you're going to find yourself in it's going to be beneficial to have that in place just to protect everybody protect liability on both ends and make sure everybody's in agreement with exactly what's going on in home I also highly suggest while I'm providing you with this lease agreement template down
00:03:43
below and as a free resource highly suggest that you still go and talk with with an attorney make sure that it it complies with complies with your state laws and everything's in place there for you cuz you don't want to waste a bunch of time and and have something that just doesn't work for you so always consults an attorney when you're dealing with these types of things it's going to be the best thing for you I will say that the lease agreement I'm providing is one is kind of a standard one that I got
00:04:09
from my attorney and we I've just taken out some of the individualized things of it and created more of a template for you but you're still going to want to have that conversation so make sure you involve your attorney as you're going through this process so now let's talk about who is going to create this lease agreement typically like almost always it's going to be the landlord that is creating that lease agreement they're putting it together they're providing that to you as an operator with that U
00:04:33
that kind of outlines step by step you may come across something and I actually have some experience with this from a past life where as a tenant I was the one that was kind of creating the lease agreement and then handing it off to a landlord who would then make the tweaks that they wanted to do um in doing this I used to run through a mission that I served in my church I used to run real estate stuff and so I I was over about 50 apartments and doing the lease agreements for and so that's kind of the
00:04:59
experience that I had there and doing that and I had to end up creating all the lease agreements myself and handing that off to landlords um but typically the landlord is going to be the one that's creating this lease agreement they're handing it off to the operator and and they're going to provide that to them so they can review that and make sure that everybody's in line with it plus as a landlord you want to it's really for you it's really for you to give you the protection to give you the
00:05:22
out if you need to so making sure that this is really tight on your end is going to give you some added protection so as an operator what I'm going to tell you is um you want to review these lease agreements you want to make sure you're comfortable with exactly what's in there if you have an attorney which I recommend you do have them review it make sure they understand what's going into that because you just want to understand what you're getting yourself into uh it's going to benefit you quite
00:05:45
a bit before you sign that because these are legal documents they're binding and you know if you break the lease agreement then you're subject to any of the the things that might come out of that so just want to make sure that that's really clear for for everybody as you get into that and you know you also want to make make sure that you're I mentioned this a little bit earlier but you want to make sure you're following the state rules as you're doing this the state where you're operating you want to
00:06:06
make sure that it complies with that it is up to date and that everything is kind of in place for the for how that is going to work if you have any questions about lease agreements how they work what they are who's creating them or things like that make sure you drop that down below as well I would love to kind of help you give you some guidance on exactly what that's going to look like for you as a landlord or an operator CU I've been on both sides of that coin and can give you some guidance there to help
00:06:29
you out and if you have something you're just like oh man we need a video on this topic make sure you drop that down below as well so I can create something that's going to help you out with that now let's talk about some of the other things that are going to kind of be you know you you probably are going to be requirements or things that are going to be inside of a lease agreement that you either want to be aware of or if you're creating that lease agreement that you want to make sure you're listing in
00:06:49
there as requirements so number one is going to be Insurance you're going to want to make sure that there's a requirement for insurance and that's going to be property or renters insurance that there's liability insurance in place and that there's workers comp insurance for the staff that are in the facility um you want to make sure that there's some kind of a stipulation in there for that one uh it's a big one insurance is huge when it comes to this type of a venture because
00:07:13
you people fall or or stuff happens and and you want to make sure that you're covered and and that you have the liability coverage that you need in case something does happen to the home or to your staff or to the residents um having that in place is going it's just absolutely key so you want to make sure that you have that you also want to make sure that there are maybe you're building something in there for potential rate adjustments so if your debt service is an adjustable rate then
00:07:39
you want to make sure that that is written inside of the lease um if you're the owner operator you own the the facility and the business you can kind of adjust this on the fly as needed but if you are a landlord and you're leasing out to somebody and you have an adjustable rate or you know something's going to happen you want to make sure that you can account for that fluctuation in the rates as you're going through that so that you don't get stuck and and all of a sudden you're losing
00:08:03
money on your property so you want to make sure that that's a thing that's in place this is something that you need to be aware of as if you're dealing with the SBA because the SBA rates are often going to fluctuate they're going to adjust and so you want to make sure that you are counting for that it's going to help save you on the back end for sure the next thing you're going to need signatures you need Wet signatures on these possibly a notary as well so that you have these so this contract this
00:08:26
lease agreement is you know it's official and and it will hold up in in a court if you end up needing to get there hopefully nobody does I I really hope that everybody listening to this doesn't have to deal with that but it is the reality of working and owning a business and owning real estate and all of those things it's best to do things the right way have signatures possibly a notary depending on your state requirements and it's just going to help you understand what goes into this so that you can
00:08:52
protect yourself and make sure everybody's on the same page and and things are moving forward well so if you liked this you have any questions make sure you're commenting those down below but if this video was helpful to you make sure you hit the like button ring the bell as well so you get notified every time we do these videos we go live on Tuesdays and we put out content on Thursdays as well join the Facebook group we have a lot of stuff there ton of links down below for free resources
00:09:15
and if you need some help make sure you get over to the website assisted Livin investing. net we have our free calculator the lease agreement uh we also have a business planning guide that's going to teach you the basics of everything that you need to help you get started on your path to launching your Assisted Living business it's that phase one of everything you need building that base so that you can start moving forward business planning guide is where you can get that and if you want some
00:09:39
assistance and need some guidance as you're going through this check out our Mastermind program I love helping people in there it's so exciting to get in there and and work with the people that are members of The Mastermind and help them learn and grow and progress so if you want to check out more about that go to Assisted Living investing. netmaster if you want to have a free strategy session to talk a little bit about that your goals and and things like that see if it's a good fit for you you can do
00:10:01
that Assisted Living investing. net strategy does residential Assisted Living sound interesting to you but you don't know how to get started at Assisted Living investing. net we're here to help you help beginners like you launch their Assisted Living business in the next 12 months so you can create that time of Financial Freedom that you're looking for and remember it doesn't take a lot just a little bit keep going step by step by step I promise you that if you do and you're
00:10:26
consistent and persistent you're going to be successful thanks for watching and have have a great day [Music]
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