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 Indiana Gross Up Clause is an important component of a Base Year Lease, a type of lease commonly used in commercial real estate. It helps determine the total cost of expenses associated with the leased property and ensures fairness between the landlord and the tenant. There are several types of Indiana Gross Up Clauses that can be utilized in a Base Year Lease, including the Prorate Gross Up Clause, the Expense-Stop Gross Up Clause, and the Variable Gross Up Clause. The Prorate Gross Up Clause in an Indiana Base Year Lease allocates the total expenses incurred by the landlord among all tenants in proportion to the square footage they occupy. This clause ensures that tenants pay a fair share of the common area expenses based on their individual usage or occupancy. It serves as a method to divide expenses fairly among tenants and prevents any one tenant from bearing an undue burden of the overall expenses. Another type of Indiana Gross Up Clause commonly used in Base Year Leases is the Expense-Stop Gross Up Clause. With this clause, the landlord sets a predetermined expense stop or cap for paying operating expenses. Once the expenses reach this threshold, any remaining costs are passed on to the tenant based on their proportionate share. This clause acts as a protection mechanism for the tenants, preventing them from shouldering unforeseen or excessive operating expenses. The Variable Gross Up Clause is a more intricate provision, often found in complex lease agreements. This clause accounts for fluctuations in specific expense categories, such as property taxes or insurance premiums, over the course of the lease term. It allows the landlord to adjust the amount the tenant is responsible for based on these variable expenses, ensuring a more accurate sharing of costs. Variable Gross Up Clauses are often adopted in leases with long terms or when certain expenses are expected to increase significantly over time. In summary, the Indiana Gross Up Clause is a crucial aspect of a Base Year Lease. By using different types of gross up clauses like the Prorate Gross Up Clause, Expense-Stop Gross Up Clause, or Variable Gross Up Clause, landlords and tenants can establish a fair distribution of operating expenses based on various factors. These provisions play a vital role in determining the financial obligations of both parties and help maintain a transparent and equitable relationship between landlords and tenants in Indiana.
