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 Louisiana Gross Up Clause is a crucial component to understand when drafting a comprehensive base year lease. This clause aids in accommodating fluctuations in real estate operating expenses during the base year, ensuring the lessee pays their fair share. In Louisiana, there are mainly two types of Gross Up Clauses used in a Base Year Lease. These include the Pro Rata Gross Up Clause and the Expense Reconciliation Gross Up Clause. Each serves a unique purpose, depending on the specific lease agreement and circumstances. The Pro Rata Gross Up Clause is typically utilized when there's a need to adjust expenses based on the occupancy percentage of the building during the base year. It allows the landlord to account for vacancies and gives the lessee an equitable portion of the grossed-up expenses. On the other hand, the Expense Reconciliation Gross Up Clause acts as a safeguard for both the landlord and the lessee. This clause ensures that if there's an overpayment or underpayment of expenses by the lessee during the base year, the amount is properly reconciled and adjusted. When implementing the Louisiana Gross Up Clause in a Base Year Lease, it's crucial to consider specific terms and conditions for its application. Important keywords to include in the description are "Operating Expenses," "Base Year," "Occupancy Percentage," "Vacancies," "Grossed-up Expenses," "Expense Reconciliation," "Overpayment," and "Underpayment." By using the appropriate Louisiana Gross Up Clause in a Base Year Lease, landlords and lessees can establish a fair and transparent method for managing operating expenses and maintaining a mutually beneficial lease agreement.
