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.
A Montgomery Maryland Gross Up Clause is a critical provision that should be included in an Expense Stop Stipulated Base or Office Net Lease. This clause ensures that the tenant is not burdened with unexpected costs associated with building operating expenses or taxes. The purpose of the Montgomery Maryland Gross Up Clause is to adjust the tenant's share of operating expenses or taxes in situations where the building occupancy falls below a certain benchmark, typically 95% or 90%. By using this clause, the landlord will be responsible for covering a portion of the unallocated expenses, mitigating the financial impact on the tenant. There are several types of Montgomery Maryland Gross Up Clauses that may be used in an Expense Stop Stipulated Base or Office Net Lease. These include: 1. Full Gross Up: This type of gross up clause requires the landlord to cover the entirety of unallocated expenses when the building occupancy drops below the specified benchmark. The tenant is exempt from any additional payments in such scenarios. 2. Partial Gross Up: With this clause, the tenant is only responsible for a portion of the unallocated expenses when the building occupancy falls below the benchmark. The landlord bears the remaining expenses. The exact percentage allocated to the tenant can be negotiated between both parties. 3. Proportional Gross Up: This clause proportionally reduces the tenant's share of unallocated expenses based on the decrease in building occupancy. For example, if the occupancy drops by 5%, the tenant's expense responsibility will decrease by the same percentage. The inclusion of a Montgomery Maryland Gross Up Clause is crucial to protect tenants from unexpected financial burdens resulting from a decrease in building occupancy. By using one of the aforementioned types of clauses, tenants can secure a fair and predictable expense allocation, fostering a positive and sustainable leasing experience. Keywords: Montgomery Maryland, Gross Up Clause, Expense Stop, Stipulated Base, Office Net Lease, building operating expenses, taxes, building occupancy, unallocated expenses, financial impact, landlord, tenant, full gross up, partial gross up, proportional gross up.
