This office lease form is a supplement regarding the building operating expenses which are escalated to the tenant. This form lists items to be excluded from the calculation of building operating costs.
The Colorado Building Operating Cost Addendum, also known as COBOL, is an essential document used in commercial real estate leases within the state of Colorado. This addendum provides detailed information and terms regarding the sharing and allocation of building operating costs between landlords and tenants. The COBOL outlines the expenses associated with operating and maintaining a commercial building, such as common area maintenance (CAM) costs, property management fees, insurance premiums, property taxes, repairs, utilities, and other related costs. It ensures transparency and fairness in distributing these expenses among all tenants based on the square footage or percentage of occupied space. There are different types of Colorado Building Operating Cost Addendum, including: 1. Full-service lease addendum: This type of COBOL includes all operating expenses, and the tenant pays a fixed rental rate that covers these costs in addition to the base rent. It simplifies the payment process for tenants since all expenses are included in a single monthly payment. 2. Expense stop lease addendum: In this type, the COBOL includes a specific limit or cap on the operating expenses that the landlord will cover. Any expenses exceeding this limit are typically passed onto the tenant. It allows tenants to have more control over their expenses but may lead to fluctuations in monthly payments. 3. Triple net (NNN) lease addendum: This type of COBOL outlines that tenants are responsible for all operating expenses, including CAM costs, property taxes, and insurance. The tenant pays a base rent along with these expenses directly, providing transparency in cost allocation. In summary, the Colorado Building Operating Cost Addendum is a vital component of commercial lease agreements, ensuring clarity and fairness in sharing building operating expenses between landlords and tenants. By incorporating this addendum into lease contracts, both parties can better manage costs and maintain the property effectively.
