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 New Jersey Clause for Grossing Up the Tenant Proportionate Share refers to a specific provision within a lease agreement that outlines the method by which the tenant's share of operating expenses will be calculated and adjusted. This clause is particularly relevant in commercial real estate leases, where tenants typically bear a portion of the property's operating costs. The purpose of the New Jersey Clause for Grossing Up the Tenant Proportionate Share is to ensure that tenants are responsible for their fair share of the property's operating expenses, even if the property is not fully occupied. This is achieved by "grossing up" the tenant's proportionate share, which means adjusting the calculation to reflect a hypothetical occupancy rate. There are several types of New Jersey Clause for Grossing Up the Tenant Proportionate Share that may be included in lease agreements: 1. Gross-Up Clause: This clause provides for the adjustment of the tenant's proportionate share of operating expenses based on a specified occupancy rate. Typically, this rate is the greatest of either the actual occupancy rate or a predetermined percentage set by the landlord. 2. Expense Stop Clause: This clause establishes a specific amount, known as the "expense stop," above which the tenant is responsible for a portion of the operating expenses. If the property's total operating expenses exceed the expense stop, the tenant will be responsible for their proportionate share of the excess expenses. 3. Escalation Clause: This clause addresses the annual increase in the property's operating expenses. It outlines the method by which the tenant's proportionate share will be adjusted each year, taking into account factors like inflation, property upgrades, and market conditions. 4. Base Year Clause: In this clause, a specific year, known as the base year, is identified as the reference point for calculating the tenant's proportionate share. All subsequent years' expenses will be compared to the base year, and any increase will be passed on to the tenant accordingly. The New Jersey Clause for Grossing Up the Tenant Proportionate Share aims to ensure fairness in distributing operating expenses among tenants, taking into consideration factors such as occupancy rates, annual increases, and expense limits. It is essential for both landlords and tenants to clearly understand and negotiate the terms of this clause to avoid any disputes or misunderstandings regarding the proportionate sharing of operating costs.
