Measurement Representations and Proportionate Share Adjustment of Tenants Proportionate Tax Share
Understanding this form
The Measurement Representations and Proportionate Share Adjustment of Tenants Proportionate Tax Share is a legal clause used in office lease agreements. It defines how a tenant's share of property taxes is calculated and adjusted based on changes in the rentable square footage of the property. This clause ensures that the tenant pays their fair proportion of taxes relative to both their leased space and any modifications to the property, setting it apart from general lease agreements that may not address such tax adjustments in detail.
Main sections of this form
- Definition of Tenant's Tax Share and its calculation based on rentable square footage.
- Procedure for adjusting the Tenant's Tax Share due to changes in the property's square footage.
- Provisions for tax adjustments when portions of the property are transferred to affiliated entities.
- Guidelines for tenant objections to adjustments and the arbitration process for disputes.
Situations where this form applies
This form is applicable when entering an office lease agreement that includes provisions for tax share adjustments. It is particularly important in scenarios where the total rentable square footage of the property may change due to renovations, lease terminations, or property conveyances. Additionally, it is relevant when establishing how property taxes are shared among tenants, ensuring clarity in tax obligations over the lease term.
Who should use this form
- Property owners or landlords who wish to clearly define tax responsibilities in lease agreements.
- Commercial tenants who need to understand their financial obligations related to property taxes.
- Real estate attorneys involved in drafting or reviewing commercial lease agreements.
Steps to complete this form
- Identify all parties involved in the lease, including the landlord and tenant.
- Clearly specify the property being leased and its relevant rentable square footage.
- Outline the calculation method for the Tenant's Tax Share, including any adjustments for changes in property dimensions.
- Include procedures for any disputes regarding tax share adjustments, outlining arbitration methods if necessary.
- Ensure both parties review and sign the completed document to acknowledge their agreement to the terms.
Notarization requirements for this form
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.
Avoid these common issues
- Failing to clearly define the method of calculating the Tenant's Tax Share.
- Not specifying procedures for addressing objections to adjustments.
- Overlooking the need for both parties to sign the document.
Advantages of online completion
- Convenience of downloading and filling out the form from anywhere at any time.
- Editability allows users to customize the form to fit specific lease agreements.
- Reliability, knowing that the form is drafted by licensed attorneys to meet legal standards.
Legal use & context
- This form ensures that both tenants and landlords understand their tax responsibilities.
- Enforceability is strengthened through clearly defined terms and adjustment procedures.
- Failure to utilize this form may lead to misunderstandings regarding tax payments and liabilities.
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FAQ
An Annual Increase is a clause in a lease which provides for the base rent amount or operating expenses to be increased and/or to reflect changes in expenses paid by the landlord such as real estate taxes, insurance and operating expenses.
AR usually indicates arrears (behind in rent). Base Rent AR seems to indicate 2 months' of rent in arrears. Retro may mean rent previous to the current month (money owed previously). This could be late fees or other fees owed.
In general, the tenant's proportionate share is determined by taking the building's rentable square footage and dividing it by the tenant's rentable square footage.
Gross Lease/Full Service Lease In a gross lease, the tenant's rent covers all property operating expenses. These expenses can include, but aren't limited to, property taxes, utilities, maintenance, etc. The landlord pays these expenses using the tenant's rent to offset the costs.
The Base Year is a year that is tied to the actual amount of expenses for property taxes, insurance and operating expenses (sometimes called CAM) to run the property in a specified year. In a new lease, the Base Year is most often the year the lease is executed or the year in which the lease commences.
When prices rise, the landlord can raise monthly lease payments. A reappraisal clause. A lease agreement may also contain a reappraisal clause which allows for a hike in rent following an annual appraisal of the property. Again, this is likely only to result in an increase in rent.
A modified gross lease is a type of real estate rental agreement where the tenant pays base rent at the lease's inception, but it takes on a proportional share of some of the other costs associated with the property as well, such as property taxes, utilities, insurance, and maintenance.
The amount of rent that gets paid as operating costs might be called additional rent or TMI (taxes, maintenance and insurance).
