This office lease clause should be used in a base year lease. This form states that 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 in accordance with industry standards of the building operating costs. This amount shall be deemed to be the amount of building operating costs for the year.
Ohio Gross Up Clause that Should be Used in a Base Year Lease The Ohio Gross Up Clause is an important provision that should be included in a Base Year Lease in order to account for changes in operating expenses within a commercial property. This clause ensures that the tenant is responsible for a fair share of operating expenses, even if the property undergoes changes in occupancy rates or operating costs during the lease term. There are three types of Ohio Gross Up Clause that can be used in a Base Year Lease: 1. Proportional Gross Up Clause: This type of clause specifies that the tenant will be responsible for a proportionate share of any increase in operating expenses that occur during the lease term. The landlord calculates the gross-up by determining the ratio of the tenant's square footage to the total leasable area in the building. This ensures that the tenant is only responsible for their fair share of expenses. 2. Expense Stop Gross Up Clause: This clause sets a predetermined expense stop or a cap on operating expenses that the tenant is responsible for. Any expenses that exceed the expense stop are grossed up by the landlord and allocated to the tenant. This type of clause provides a predictable maximum expense amount for the tenant and protects them from excessive cost increases. 3. Base Year Gross Up Clause: This clause requires the landlord to "gross up" the tenant's operating expenses to a fixed percentage of occupancy. The base year is typically the year in which the lease is signed, and the tenant will only be responsible for an increase in expenses above the base year amount. This type of clause allows the tenant to have a stable starting point for operating expense calculations and protects them from any abnormal or unpredictable fluctuations in costs. When drafting an Ohio Gross Up Clause in a Base Year Lease, it is crucial to consider factors such as the size of the property, the type of commercial space, inflation rates, and market conditions. Consulting with legal professionals and experienced real estate experts can ensure that the clause accurately reflects the intentions and interests of both the landlord and the tenant. Overall, including an Ohio Gross Up Clause that is suitable for the specific circumstances of the lease can help maintain fairness and transparency in the allocation of operating expenses throughout the lease term.
