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.
When it comes to commercial real estate leases in Florida, one important clause that often comes into play is the Grossing Up the Tenant Proportionate Share clause. This clause addresses how the tenant's share of expenses, such as taxes, insurance, and common area maintenance (CAM), is calculated and adjusted in case of certain expenses changing. The Grossing Up the Tenant Proportionate Share clause ensures fairness in distributing these costs among all tenants in a property, taking into account any fluctuations in expenses. It prevents individual tenants from shouldering an unfair burden while ensuring that the landlord receives the necessary income to cover these expenses. This can be particularly relevant in multi-tenant properties like shopping centers, office buildings, or industrial parks. There are two main types of Florida Clause for Grossing Up the Tenant Proportionate Share: 1. Fixed Expense Stop: Under this type, the tenant's proportionate share is capped at a specific amount. If the expenses go beyond this predetermined amount, the landlord absorbs the excess cost. For example, if the fixed expense stop is set at $10,000 and the total expenses amount to $12,000, the tenant would only pay their share based on $10,000, while the landlord covers the remaining $2,000. 2. Base Year Expense: With this type of clause, the tenant's proportionate share is determined based on a specified base year. The expenses in the base year act as a benchmark, and any increases or decreases in subsequent years are passed on to the tenants. For example, if the base year expense is $8,000 and the expenses in the following year amount to $9,000, the tenant would pay their proportionate share based on the $9,000 amount. Both types of clauses aim to ensure predictability and fairness for tenants when it comes to shared expenses. By using either the Fixed Expense Stop or Base Year Expense approach, landlords can protect tenants from sudden spikes in costs while still accounting for changes in expenses over time. In summary, the Florida Clause for Grossing Up the Tenant Proportionate Share is a critical component of commercial leases. It helps maintain a balanced distribution of expenses among tenants and provides a framework for handling fluctuations in costs. Whether utilizing a Fixed Expense Stop or Base Year Expense approach, this clause plays an essential role in ensuring fair and predictable financial obligations for all parties involved in the lease agreement.
