This office lease clause should be used in an expense stop, stipulated base or office net lease. 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 for each lease year to determine what the building operating costs. Such an adjustment shall be made by the landlord increasing the variable components of such variable costs included in the building operating costs which vary based on the level of occupancy of the building.
A Missouri Gross Up Clause is a legal provision commonly used in commercial lease agreements, specifically in the context of Expense Stop Stipulated Base or Office Net Leases. This clause ensures a fair distribution of operating expenses among tenants, accounting for variables such as vacancy rates and tenant occupancy levels. In other words, it establishes a mechanism to adjust a tenant's payment obligation in relation to shared expenses based on certain criteria. There are several types of Missouri Gross Up Clauses that can be used in an Expense Stop Stipulated Base or Office Net Lease. These may include: 1. Basic Gross Up Clause: This type of clause allows the landlord to calculate the tenant's proportionate share of operating expenses by factoring in any vacant or unoccupied spaces. It ensures that tenants are not burdened with the entire cost of common area charges when some areas are not in use. 2. Fully Loaded Gross Up Clause: In this variation, the landlord incorporates all operating expenses, including those that are normally variable or fluctuating, such as utilities. It takes into account the varying costs of these expenses throughout different periods, thereby providing a comprehensive picture of the actual costs incurred by the landlord. 3. Variable Gross Up Clause: This clause enables the landlord to calculate a tenant's share of expenses based on the occupancy rate within the building. It ensures that tenants with larger spaces or higher occupancy levels bear a proportionally higher burden of the shared costs. 4. Expense Reconciliation Gross Up Clause: This type of clause allows the landlord to recalculate a tenant's obligations at the end of each fiscal year, considering the actual expenses incurred. It ensures that tenants' payments accurately reflect the actual costs and prevents any potential overpayment or underpayment. 5. Modified Gross Up Clause: In certain situations, a modified gross up provision may be used. It involves adjustments to the base rent to account for operating expenses, thus simplifying the process. This variant may be preferable when it is not feasible or practical to calculate and allocate expenses on a detailed basis. Landlords should carefully consider the specific needs and circumstances of their lease agreements before selecting the appropriate Missouri Gross Up Clause. It is crucial to consult legal professionals well-versed in Missouri real estate laws to ensure the clause is tailored to comply with local regulations and achieve a fair distribution of expenses among tenants.
