Measurement Representations and Proportionate Share Adjustment of Tenants Proportionate Tax Share
Understanding this form
This Measurement Representations and Proportionate Share Adjustment of Tenants Proportionate Tax Share form is a legal clause included in office leases. It outlines how a tenant's share of property taxes is calculated and adjusted based on changes in the space they occupy within a commercial property, such as an office building or shopping center. Unlike standard lease agreements, this form specifically addresses tax obligations and adjustments based on changes in rentable square footage, ensuring fairness and transparency in tax payments.
Main sections of this form
- Definition of "Tenant's Tax Share" and its calculation based on rentable square footage.
- Adjustment clauses for changes in rentable area within the property.
- Provisions for conveyance of property to affiliated entities and its impact on tax obligations.
- Dispute resolution process for tenant objections to tax adjustments.
- Requirements for confirming adjustments through an instrument or written notice.
When to use this form
This form is essential when entering into an office lease that may face changes in the tenant's leased space, such as expansions, reductions, or transfers of property ownership. It is particularly valuable for tenants who want clarity on how their tax share will be calculated and adjusted over time as changes occur within the leasing structure.
Who this form is for
- Commercial tenants leasing office space or retail space in multi-tenant buildings.
- Landlords seeking to clarify tax share responsibilities in lease agreements.
- Property managers dealing with adjustments in tax calculations due to property developments.
Completing this form step by step
- Identify the parties involved: the landlord and the tenant.
- Specify the premises being leased, including any relevant square footage details.
- Outline any adjustments needed for changes in rental space.
- Detail the process for resolving disputes regarding tax share adjustments.
- Include signatures from both parties to confirm agreement and understanding.
Does this document require notarization?
In most cases, this form does not require notarization. However, some jurisdictions or signing circumstances might. US Legal Forms offers online notarization powered by Notarize, accessible 24/7 for a quick, remote process.
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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.
Mistakes to watch out for
- Failing to adjust the tax share after a change in rentable area.
- Not providing timely written objection if the tenant disagrees with an adjustment.
- Overlooking the need for both parties to sign instruments confirming tax adjustments.
Why use this form online
- Convenient access to customizable templates designed by legal professionals.
- Easy editing and saving options for future use or updates.
- Secure storage of completed forms for peace of mind.
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).