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.
In the context of commercial leases in Louisiana, the Louisiana Clause for Grossing Up the Tenant Proportionate Share is a provision that relates to the calculation of a tenant's share of certain expenses in a multi-tenant property. This clause aims to allocate costs such as common area maintenance (CAM) expenses, property taxes, insurance premiums, and utility expenses among the various tenants in a fair and equitable manner. The basic principle behind the Louisiana Clause for Grossing Up the Tenant Proportionate Share is to ensure that each tenant's share of the expenses is proportionate to the leased square footage they occupy within the property. This eliminates any potential inequities that may arise due to variations in tenant occupancy or vacant spaces within the property. There are different types or variations of the Louisiana Clause for Grossing Up the Tenant Proportionate Share that landlords and tenants may encounter in commercial lease agreements. These include: 1. Fully Grossed-Up Basis: Under this type of clause, the landlord is responsible for covering all operating expenses associated with the property. The tenant's rent includes a fully grossed-up amount, meaning that it already accounts for their proportionate share of expenses. 2. CPI (Consumer Price Index) Adjustment: In some instances, the Louisiana Clause for Grossing Up the Tenant Proportionate Share may provide for adjustments to a tenant's share of expenses based on changes in the Consumer Price Index. This adjustment allows for keeping the proportionate share updated and reflective of the fluctuations in inflation. 3. Separate Overage Provision: This variation of the clause may specify that if the actual expenses incurred in a given year exceed the estimates provided by the landlord, the tenant will be responsible for paying their share of the excess amount. This provision ensures that the tenant does not inadvertently benefit from any underestimation of expenses. 4. Minimum Rent Threshold: Some leases include a minimum rent threshold in regard to operating expenses. If the actual expenses do not reach or exceed this threshold, the tenant is not obligated to pay their proportionate share of the expenses. This protects tenants from disproportionately high expenses for minor maintenance or repair work. Overall, the Louisiana Clause for Grossing Up the Tenant Proportionate Share is a crucial component of commercial lease agreements in Louisiana as it establishes a fair mechanism for allocating expenses among tenants. The specific type of clause used will depend on the negotiating dynamics and preferences of the parties involved in the lease agreement.
