This office lease clause should be used in an expense stop, stipulated base or office net lease. When the building is not at least 95% occupied during all or a portion of any lease year, the landlord shall make an appropriate adjustment for each lease year to determine what the building operating costs. Such an adjustment shall be made by the landlord increasing the variable components of such variable costs included in the building operating costs which vary based on the level of occupancy of the building.
The Washington Gross-up Clause is a crucial provision to include in an Expense Stop Stipulated Base or Office Net Lease agreement. This clause ensures that the tenant is not burdened with unexpected increases in property expenses beyond the agreed-upon expense stop threshold. Keywords: Washington Gross-up Clause, Expense Stop, Stipulated Base, Net Lease, Office Lease, Property Expenses In Washington, several types of Gross-up Clauses are commonly used in Expense Stop Stipulated Base or Office Net Leases. These clauses aim to protect both the landlord and the tenant by clearly defining the responsibilities and limitations related to property expense escalations. Some variations of Washington Gross-up Clauses include: 1. Standard Washington Gross-up Clause: This type of clause typically states that if the property expenses exceed the agreed-upon expense stop threshold, the landlord will be responsible for grossing up the excess portion. The landlord must absorb the additional expenses, ensuring the tenant does not face unexpected financial burdens. 2. Expense Pass-through Gross-up Clause: This clause enables the landlord to pass on any incremental property expenses beyond the expense stop threshold to the tenant. However, the clause specifies that the landlord must gross up these expenses in a fair and reasonable manner, ensuring that the tenant is not overburdened. 3. Operating Expense Gross-up Clause: This type of clause specifically pertains to operating expenses incurred for maintaining and managing the leased property. It stipulates that if these expenses exceed the expense stop threshold, the landlord is responsible for grossing up the excess amount to prevent unexpected costs for the tenant. 4. Real Estate Tax Gross-up Clause: This clause focuses on grossing up any increase in real estate taxes beyond the expense stop threshold. It ensures that the tenant is not unexpectedly liable for any significant tax hikes and places the responsibility on the landlord to cover the excess amount. 5. Utility Expense Gross-up Clause: This type of clause addresses utility expenses, such as electricity, water, and gas. It outlines that if these expenses exceed the agreed-upon expense stop threshold, the landlord must gross up the excess portion, shielding the tenant from unexpected spikes in utility costs. Including a Washington Gross-up Clause in an Expense Stop Stipulated Base or Office Net Lease provides clarity and protection for both parties. By clearly defining the responsibilities and limitations regarding property expense escalations, this clause helps foster a fair and reasonable lease agreement.
