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 Texas Clause for Grossing Up the Tenant Proportionate Share is an important aspect of commercial leases in the state of Texas. It refers to the provision that determines how the tenant's share of operating expenses, commonly referred to as the tenant's proportionate share, is calculated and adjusted in certain circumstances. In commercial leases, operating expenses like property taxes, insurance premiums, and common area maintenance costs are often shared among multiple tenants in a building. The tenant's proportionate share is typically determined based on the amount of leasable square footage they occupy compared to the total leasable square footage of the building. The Texas Clause for Grossing Up the Tenant Proportionate Share comes into play when there are vacancies or unoccupied spaces in the building. In such situations, a landlord may desire to "gross up" the tenant's proportionate share by including the expenses that the vacant spaces would have incurred if they were occupied. This ensures that the operating expenses are equally distributed among all the tenants, regardless of the vacancies. There are a few different types of Texas Clauses for Grossing Up the Tenant Proportionate Share, each with its own variations and specifications. These clauses may include: 1. Full Gross-Up Clause: This type of clause requires the tenant to pay their proportionate share of operating expenses as if the building were fully occupied, regardless of the actual occupancy level. It takes into account expenses related to both occupied and vacant spaces. The tenant is responsible for a higher proportionate share to cover the costs associated with the vacant spaces. 2. Partial Gross-Up Clause: This clause allows the landlord to include only a portion of the expenses related to the vacant spaces in the calculation of the tenant's proportionate share. The specific percentage or amount to be included is usually stated in the lease agreement. This type of clause offers some relief to the tenant by not fully burdening them with the costs of vacant spaces. 3. No Gross-Up Clause: In contrast to the previous types, this clause does not include any expenses related to vacant spaces in the tenant's proportionate share calculation. The tenant is only responsible for their share of the actual expenses incurred by the occupied spaces. This type of clause provides the tenant with the most favorable financial arrangement, as they are not burdened with expenses unrelated to their occupied space. It is important for both landlords and tenants to carefully review and negotiate the details of the Texas Clause for Grossing Up the Tenant Proportionate Share to ensure that it aligns with their respective expectations and obligations. Consulting with a legal professional experienced in commercial real estate and lease agreements is advisable to ensure a clear understanding of this clause and its implications.
