This office lease clause should be used in a base year lease. This form states that when the building is not at least 95% occupied during all or a portion of any lease year the landlord shall make an appropriate adjustment in accordance with industry standards of the building operating costs. This amount shall be deemed to be the amount of building operating costs for the year.
The District of Columbia Gross Up Clause is a crucial component that should be included in a Base Year Lease. This clause is specifically relevant for commercial leases in the District of Columbia and outlines the method for adjusting the tenant's operating expenses based on changes in the building's occupancy levels. In a Base Year Lease, the term "gross up" refers to adjusting the tenant's operating expenses to account for situations where the building is not fully occupied. The purpose of this clause is to ensure that the tenant is not unfairly burdened with a higher share of operating expenses when the building's occupancy is low. There are different types of Gross Up Clauses that can be used in a Base Year Lease in the District of Columbia. One common type is the "Load Factor Gross Up Clause." In this clause, the tenant's operating expenses are adjusted based on the ratio of occupied space to the total leasable area. This ensures that the tenant's expenses are proportionate to the area they occupy, regardless of the building's overall occupancy rate. Another type of Gross Up Clause is the "Variable Occupancy Gross Up Clause." This clause takes into account the specific occupancy levels on each floor or area of the building. Expenses are adjusted based on the actual occupancy of the tenant's floor or area, providing a more accurate allocation of operating expenses. The District of Columbia Gross Up Clause also protects the tenant from being unfairly burdened with higher operating expenses due to vacancies or unoccupied areas within the building. It ensures an equitable distribution of costs among tenants while accounting for varying occupancy levels. When drafting a Base Year Lease in the District of Columbia, it is recommended to consult with legal professionals who specialize in commercial leases to accurately incorporate the appropriate type of Gross Up Clause. This will provide both landlord and tenant with a fair and transparent method for adjusting operating expenses based on occupancy levels, ensuring a harmonious leasing experience for all parties involved.
