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 Alabama Gross Up Clause is a crucial provision that should be included in an Expense Stop Stipulated Base or Office Net Lease. This clause ensures that tenants in commercial properties are not burdened with unexpected increases in operating expenses. In the context of commercial leases, an Expense Stop is a predetermined limit on the amount a tenant is responsible for paying towards operating expenses. However, this does not mean that tenants will never have to pay additional costs if expenses exceed the Expense Stop. This is where the Alabama Gross Up Clause comes into play. There are several types of Gross Up Clauses that can be used in an Expense Stop Stipulated Base or Office Net Lease in Alabama. These include: 1. Full Gross Up: With this type of clause, if the total operating expenses exceed the Expense Stop, the tenant's share will be calculated based on the percentage of the property they occupy. For instance, if a tenant occupies 20% of a building and the total expenses are $100,000, their share would be $20,000. 2. Partial Gross Up: In this scenario, the tenant's share of operating expenses is calculated based on a predetermined percentage, regardless of whether the total expenses exceed the Expense Stop. For example, if the partial gross up rate is set at 75%, the tenant is responsible for paying 75% of the operating expenses, regardless of the actual costs. 3. CPI-Based Gross Up: This type of Gross Up Clause takes into account the Consumer Price Index (CPI) to adjust the tenant's share of operating expenses. If the expenses exceed the Expense Stop, the tenant's portion is adjusted according to the CPI percentage increase over a specified period. 4. Escalation-Based Gross Up: With this clause, the tenant's share of operating expenses is escalated based on a predetermined rate over a specified period. For instance, if the escalation rate is set at 3% annually, the tenant's share will increase by 3% each year, regardless of whether the expenses exceed the Expense Stop. Including an Alabama Gross Up Clause in an Expense Stop Stipulated Base or Office Net Lease provides crucial protection for both tenants and landlords. It ensures that tenants are not unfairly burdened with unpredictable increases in operating expenses, while also ensuring that landlords can cover their costs and maintain the property efficiently.The Alabama Gross Up Clause is a crucial provision that should be included in an Expense Stop Stipulated Base or Office Net Lease. This clause ensures that tenants in commercial properties are not burdened with unexpected increases in operating expenses. In the context of commercial leases, an Expense Stop is a predetermined limit on the amount a tenant is responsible for paying towards operating expenses. However, this does not mean that tenants will never have to pay additional costs if expenses exceed the Expense Stop. This is where the Alabama Gross Up Clause comes into play. There are several types of Gross Up Clauses that can be used in an Expense Stop Stipulated Base or Office Net Lease in Alabama. These include: 1. Full Gross Up: With this type of clause, if the total operating expenses exceed the Expense Stop, the tenant's share will be calculated based on the percentage of the property they occupy. For instance, if a tenant occupies 20% of a building and the total expenses are $100,000, their share would be $20,000. 2. Partial Gross Up: In this scenario, the tenant's share of operating expenses is calculated based on a predetermined percentage, regardless of whether the total expenses exceed the Expense Stop. For example, if the partial gross up rate is set at 75%, the tenant is responsible for paying 75% of the operating expenses, regardless of the actual costs. 3. CPI-Based Gross Up: This type of Gross Up Clause takes into account the Consumer Price Index (CPI) to adjust the tenant's share of operating expenses. If the expenses exceed the Expense Stop, the tenant's portion is adjusted according to the CPI percentage increase over a specified period. 4. Escalation-Based Gross Up: With this clause, the tenant's share of operating expenses is escalated based on a predetermined rate over a specified period. For instance, if the escalation rate is set at 3% annually, the tenant's share will increase by 3% each year, regardless of whether the expenses exceed the Expense Stop. Including an Alabama Gross Up Clause in an Expense Stop Stipulated Base or Office Net Lease provides crucial protection for both tenants and landlords. It ensures that tenants are not unfairly burdened with unpredictable increases in operating expenses, while also ensuring that landlords can cover their costs and maintain the property efficiently.
