This office lease clause states the conditions under which the landlord can and can not furnish any particular item(s) of work or service which would constitute an expense to portions of the Building during the comparative year.
Arkansas Clause for Grossing Up the Tenant Proportionate Share is a legal provision commonly found in commercial lease agreements within the state of Arkansas. This clause addresses the issue of reimbursing tenants for any increases in operating expenses or real estate taxes incurred by the landlord. The purpose of this clause is to ensure that tenants are not burdened with unexpected cost escalations during the term of their lease. Under the Arkansas Clause for Grossing Up the Tenant Proportionate Share, tenants are only required to pay a specific proportionate share of operating expenses or real estate taxes based on the size or square footage of the leased premises. This means that if the total operating expenses or real estate taxes increase, the tenant's proportionate share will also increase accordingly. To calculate this increase accurately, landlords in Arkansas may use different methods or formulas to determine the tenant's proportionate share. Some common types of Arkansas Clause for Grossing Up the Tenant Proportionate Share include: 1. Variable Proportionate Share: In this scenario, the tenant's proportionate share is determined by calculating a percentage based on the total square footage of the leased premises in relation to the total square footage of the entire building or property. The percentage remains constant throughout the lease term, regardless of changes in operating expenses or real estate taxes. 2. Expense Stops Variable Proportionate Share: Under this variation of the clause, the tenant's proportionate share is based on the total operating expenses or real estate taxes incurred by the landlord, up to a predetermined threshold known as the "expense stop." Once the expenses exceed this limit, the tenant is responsible for their proportionate share of the excess expenses. 3. CPI Adjustment: This type of Arkansas Clause for Grossing Up the Tenant Proportionate Share incorporates the Consumer Price Index (CPI) as a calculation factor. The tenant's proportionate share is adjusted annually based on the CPI percentage change, ensuring that any increase in expenses or taxes reflects the inflation rate. 4. Gross-Up Clause: The Gross-Up Clause is designed to protect tenants from unexpected discrepancies between the occupancy rate of a property and the actual amount of operating expenses or real estate taxes incurred. This clause enables landlords to "gross-up" the tenant's proportionate share, adjusting it to reflect the operating expenses or real estate taxes that would apply if the property had reached 100% occupancy. In conclusion, the Arkansas Clause for Grossing Up the Tenant Proportionate Share allows for fair allocation of increasing operating expenses or real estate taxes between landlords and tenants. Landlords may choose from various types of clauses, such as Variable Proportionate Share, Expense Stop Variable Proportionate Share, CPI Adjustment, and Gross-Up Clause, to determine how the tenant's proportionate share is calculated and adjusted in response to changing expenses.
