This office lease clause should be used in an expense stop, stipulated base or office net lease. 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 for each lease year to determine what the building operating costs. Such an adjustment shall be made by the landlord increasing the variable components of such variable costs included in the building operating costs which vary based on the level of occupancy of the building.
The District of Columbia Gross Up Clause is a crucial provision to include in an Expense Stop Stipulated Base or Office Net Lease in order to ensure fairness and avoid potential disputes over operating expenses. This clause determines the manner and extent to which certain expenses will be allocated and charged to tenants. One type of gross up clause commonly used in the District of Columbia is the "Pass-Through Gross Up Clause." This clause stipulates that if the total operating expenses for a specific year do not reach the Expense Stop identified in the lease agreement, then the landlord has the right to gross up the amount by spreading the deficit evenly among the remaining tenants. This ensures that the landlord is not left shouldering the entire expense burden and that tenants contribute their fair share. Another important type of District of Columbia Gross Up Clause is the "Gross Up Provision for Year of Acquisition or Sale." This clause addresses the situation when a property is acquired or sold during a particular calendar year. It determines the method by which operating expenses are adjusted to reflect the actual costs incurred during the period in which the property was under the previous ownership and during the period under the new ownership. This provision prevents either party from unfairly benefiting or being burdened by expenses that don't correspond to their period of ownership. Additionally, in the District of Columbia, the "Gross Up Clause for Vacant Space" is commonly used. This clause provides a mechanism for calculating operating expenses when a tenant's space is vacant. It allows the landlord to allocate a proportionate share of expenses that would have been incurred if the space had been occupied, ensuring that the remaining tenants are not unfairly burdened with the unoccupied space's expenses. Implementing these different types of District of Columbia Gross Up Clauses helps create a fair and equitable distribution of operating expenses among tenants. It minimizes the potential for disputes and promotes transparency in the lease agreement. By incorporating these crucial provisions into an Expense Stop Stipulated Base or Office Net Lease, both landlords and tenants can have confidence that the allocation of operating expenses complies with the specific regulations and requirements of the District of Columbia.
