A Holdover Premium in a Physician Lease Fails Stark Whether You Charge It or Waive It
The rental of office space exception at 42 CFR 411.357(a) requires the rent to be consistent with fair market value throughout the arrangement, including the holdover. A standard 150 percent holdover clause on 6,000 square feet of medical office space at the national average rent collects about $6,350 a month extra. CMS has said the premium has to be fair market value when the lease expires and for as long as the holdover runs, and that failing to charge a premium the lease requires may itself be a change in the terms and conditions, and may be forgiveness of a debt.