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.
The Oklahoma Gross Up Clause is a critical provision that should be included in a Base Year Lease agreement. It refers to the method of calculating and adjusting the tenant's rental payment when operating expenses in the building increase during the lease term. This clause ensures that the tenant's rental costs reflect their proportional share of the increased expenses, maintaining fairness between the landlord and the tenant. There are primarily two types of Oklahoma Gross Up Clauses that can be utilized in a Base Year Lease: 1. Fixed Expense Stop Gross Up Clause: This type of Gross Up Clause sets a predetermined base year for operating expenses. The tenant's rental payment is adjusted based on any increase in expenses above the agreed-upon base year amount. For example, if the base year operating expenses are $100,000 and in subsequent years, the expenses increase to $120,000, the tenant's rental payment will be adjusted to reflect the $20,000 increase. 2. Expense Reconciliation Gross Up Clause: In this variation, the Gross Up Clause allows for the reconciliation of operating expenses at the end of each year. The tenant is initially charged a portion of the estimated expenses, and at the end of the year, the actual expenses are calculated. If the actual expenses are higher than the estimated amount, the tenant's rental payment is adjusted upward to reflect the increase. It is essential to carefully consider which type of Gross Up Clause suits the specific needs and preferences of both the landlord and the tenant. In both cases, the Gross Up Clause helps maintain a fair distribution of costs and ensures that the tenant's rental payment accurately reflects their share of the operating expenses. This ultimately leads to transparency and satisfaction for all parties involved in the Base Year Lease agreement.
