This office lease form is regarding the renewal or other extension of the lease as it relates to the "Base Year Taxes" and the "Base Year for Operating Expenses".
Illinois Option to Renew that Updates the Tenant Operating Expense and Tax Basis is a clause in commercial lease agreements that specifically addresses the renewal terms and conditions pertaining to the tenant's responsibility for operating expenses and taxes. This provision enables the tenant to extend the lease term while ensuring that the updated expenses and tax basis are accurately reflected. In commercial lease agreements, the Illinois Option to Renew clause offers tenants the right to renew the lease for an additional term, typically with predefined renewal periods and notice requirements. This clause also allows for adjustments to the tenant's share of operating expenses and taxes based on current market conditions and changes in the property's value. To further clarify, let's consider two different types of Illinois Option to Renew clauses that update the tenant operating expense and tax basis: 1. Fixed Percentage Renewal Option: In this type of clause, the tenant's responsibility for operating expenses and taxes is recalculated based on a fixed percentage of the property's overall operating costs. For example, if the original lease specifies a 20% share of operating expenses and taxes, the renewal clause might maintain this percentage, subject to negotiation or predetermined adjustments. 2. Market Adjustment Renewal Option: This variation of the clause allows for a recalculation of the tenant's share of operating expenses and taxes based on current market conditions. Market adjustments may occur by benchmarking against similar properties in the area or considering relevant economic factors such as inflation, property value appreciation, or changes in tax rates. This type of renewal clause ensures that the tenant's expense and tax obligations remain current and reflective of the prevailing market conditions. Both types of Illinois Option to Renew that Updates the Tenant Operating Expense and Tax Basis clauses provide tenants with the flexibility to extend their lease term while accounting for changes in operating expenses and taxes. This helps protect the rights and interests of both landlords and tenants by ensuring a fair and accurate allocation of costs during the renewed lease period.
