Tax Increase Clause
What is this form?
The Tax Increase Clause is a legal provision used in office leases to outline the obligations of tenants regarding property taxes. This clause allows landlords to pass on tax increases to tenants as part of the rent. Unlike standard lease agreements, this specific clause explains how any increases in property taxes, assessments, and special assessments will impact the financial responsibilities of the tenant. Understanding this form is essential for both landlords and tenants to ensure fair and clear terms of rental agreements.
Main sections of this form
- Definitions of key terms such as Taxes, Base Tax, and Tax Year.
- Provisions detailing how tax increases are calculated and communicated to tenants.
- Clauses regarding adjustments due to tax refunds or reductions in assessed valuation.
- Special instructions for calculating additional rent based on tax increases.
- Requirements for tenants to pay additional rent related to tax increases within specific time frames.
When to use this document
This form is essential when drafting an office lease that includes provisions for potential increases in property taxes. Landlords should use this clause to protect their financial interests, while tenants should review it to understand their potential liabilities due to tax increases. It is particularly useful in areas where property taxes fluctuate or when a long-term lease is involved, ensuring both parties are clear on tax responsibilities.
Who can use this document
- Landlords looking to include tax increase provisions in commercial lease agreements.
- Commercial tenants who are entering into lease agreements and want clarity on tax liabilities.
- Real estate professionals advising clients on rental agreements.
Instructions for completing this form
- Identify the parties involvedâlandlord and tenantâand ensure that names and addresses are accurate.
- Specify the property detailsâincluding the location and description of the leased premises.
- Define "Tenants Proportionate Share" by determining the appropriate percentage of tax responsibility.
- Review and input the Base Tax amount based on the tax year specified.
- Include relevant information regarding how additional rent due to tax increases will be calculated.
Does this form need to be notarized?
This form usually doesn’t need to be notarized. However, local laws or specific transactions may require it. Our online notarization service, powered by Notarize, lets you complete it remotely through a secure video session, available 24/7.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Typical mistakes to avoid
- Failing to accurately define the "Base Tax" which can lead to disputes regarding future payments.
- Not specifying the timeframe for tax increases, leading to confusion over payment deadlines.
- Omitting the calculation method for the Tenantâs Proportionate Share, which can result in incorrect charges.
Why complete this form online
- Convenient access to legally vetted templates that save time in drafting.
- Editability that allows landlords and tenants to customize terms to meet their specific needs.
- Reliability, with forms updated to reflect current laws and best practices.
What to keep in mind
- The Tax Increase Clause protects landlords by allowing them to pass additional tax expenses to tenants.
- Tenants should carefully review this clause to understand their financial obligations regarding tax increases.
- This form is applicable in multiple states and helps streamline lease negotiations concerning tax responsibilities.
