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.
The Maine Clause for Grossing Up the Tenant Proportionate Share is an important aspect of commercial leases. This clause is designed to ensure that tenants contribute their fair share towards the operating expenses of a building, even if the building is not fully occupied. In commercial leases, tenants are generally responsible for a portion of the operating expenses, commonly known as the Proportionate Share. This share is usually calculated based on the ratio of the tenant's leased area to the total leasable area of the building. However, if the building is not fully occupied, the Proportionate Share of the operating expenses may not accurately represent the tenant's fair contribution. To address this issue, the Maine Clause allows landlords to "gross up" the tenant's Proportionate Share by adjusting it to reflect a theoretical full occupancy level. This means that the tenant's share is recalculated as if the building were fully occupied, thereby ensuring that they contribute their fair share towards the operating expenses. There are different types of the Maine Clause for Grossing Up the Tenant Proportionate Share, which may vary depending on the specific lease agreement. Some common variations include: 1. Actual Gross-Up: Under this type, the tenant's Proportionate Share is adjusted based on the actual occupancy level of the building. If the occupancy is below 100%, the tenant's share is recalculated using the actual number of occupied areas, instead of assuming full occupancy. 2. Budgeted Gross-Up: In this case, the tenant's Proportionate Share is adjusted based on a predetermined occupancy level, typically set forth in the lease agreement. The tenant's share is "grossed up" as if the building were occupied at this predetermined level, regardless of the actual occupancy. 3. Scalable Gross-Up: This variation allows for a gradual adjustment of the tenant's Proportionate Share based on the level of occupancy. For example, if the building is 80% occupied, the tenant's share would be adjusted to reflect 80% of the Proportionate Share amount. 4. Per-Occupied-Square-Foot Gross-Up: Here, the tenant's Proportionate Share is adjusted based on the actual square footage occupied by the tenant, rather than the total leased area. This approach ensures that the tenant only pays for the area they are utilizing, even if the rest of the building is unoccupied. It's important for both landlords and tenants to understand the specific Maine Clause for Grossing Up the Tenant Proportionate Share outlined in their lease agreement. This clause helps maintain fairness in the allocation of operating expenses and ensures that both parties are aware of their financial responsibilities in relation to building occupancy.
