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.
Montana Clause for Grossing Up the Tenant Proportionate Share: A Detailed Description The Montana Clause for Grossing Up the Tenant Proportionate Share is an essential aspect of commercial lease agreements. It refers to a provision that ensures fair distribution of expenses related to common areas among tenants in multi-tenant buildings. This clause protects tenants from bearing unequal financial burdens, especially when some tenants occupy smaller spaces. The clause accounts for variations in the total occupancy of the building and calculates the tenant's proportionate share based on factors like leased square footage. It mandates the landlord to reimburse or "gross up" the tenant's proportionate share to reflect the total expenses as if the building was 100% occupied. By applying this aspect, tenants are not burdened with more than their fair share of common area expenses. Different Types of Montana Clause for Grossing Up the Tenant Proportionate Share: 1. Gross Up Clause Percentage Method: This method determines the tenant's share of the grossed-up expenses based on a pre-determined percentage. For instance, if there are 80% occupancy and the clause states a gross-up percentage of 125%, the tenant's proportionate share would be calculated as 80% * 125%. 2. Gross Up Clause Variable Method: This method considers the specific occupancy level of the building during the lease term. By taking into account the actual occupancy as opposed to a fixed percentage, tenants can have a more accurate calculation of their proportionate share. For instance, if the building has 90% occupancy during a particular year, the tenant's proportionate share would be calculated based on that figure. 3. Gross Up Clause Base Year Method: This method involves using a specific year as a baseline for calculating the tenant's proportionate share. The expenses incurred during the base year serve as the benchmark, and any increase or decrease in subsequent years' expenses is proportionately shared among tenants. This method ensures that tenants do not bear the burden of sudden increases in common area expenses. It is important for both landlords and tenants to clearly define the specific type of Montana Clause for Grossing Up the Tenant Proportionate Share within lease agreements. This allows both parties to have a transparent understanding of how expenses will be allocated and reimbursed. Seeking legal advice when drafting or reviewing lease agreements is highly recommended ensuring the clause is appropriately tailored to meet the needs of all parties involved.
