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.
Utah Clause for Grossing Up the Tenant Proportionate Share: Explained In commercial leasing agreements, the Utah Clause for Grossing Up the Tenant Proportionate Share plays a crucial role in determining how the tenant's rent is calculated based on the property's operating expenses. This clause is designed to ensure fairness and an equitable distribution of costs among tenants within the same property. Key features of the Utah Clause for Grossing Up the Tenant Proportionate Share include: 1. Allocation of Operating Expenses: The clause outlines how operating expenses, such as property taxes, insurance, utilities, maintenance, repairs, and administrative costs, will be shared among tenants. Each tenant is responsible for their proportionate share, which is usually determined by the amount of square footage they rent within the property. 2. Grossing Up: The clause addresses the issue of variations in occupancy levels by establishing a method to "gross up" the tenant's proportionate share. Grossing up ensures that the tenant's obligation remains consistent even when the property is not fully leased. This provision typically makes adjustments to account for vacant or unoccupied spaces, preventing unjust burdens on the tenant. 3. Fair Calculation: The Utah Clause aims to calculate the tenant's gross rent by multiplying their proportionate share of operating expenses by a predetermined factor or percentage. This factor is often based on the percentage of leased space within the property or industry standards. By applying a consistent gross-up factor, the clause ensures that tenants pay a fair share regardless of fluctuations in occupancy rates. Types of Utah Clauses for Grossing Up the Tenant Proportionate Share: 1. Direct Gross-Up: This type of Utah Clause applies a predetermined gross-up factor to the tenant's proportionate share directly, without considering the overall occupancy levels of the property. It is a simpler method often used when there is a single tenant or when it is not practical to track vacancy rates. 2. Variable Gross-Up: The variable gross-up approach adjusts the tenant's proportionate share based on the occupancy level of the property. If the property experiences significant vacancies, the factor used to calculate the tenant's rent will be lowed, reducing their financial burden. Conversely, if the property is fully occupied, the factor will be higher to account for higher expenses shared by all tenants. The implementation of the Utah Clause for Grossing Up the Tenant Proportionate Share promotes transparency, accountability, and fair allocation of costs within a commercial leasing arrangement. By employing a consistent methodology that accounts for occupancy variations, this clause ensures that tenants bear a reasonable proportionate share of the property's operating expenses.
