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 Iowa Gross Up Clause is an important provision used in commercial leases, specifically in the context of expense stops stipulated in a base or office net lease. This clause addresses the allocation of certain expenses incurred by the landlord and ensures fair and equitable distribution among the tenants. Understanding the different types of Iowa Gross Up Clauses is crucial for both landlords and tenants to ensure compliance and a clear understanding of financial responsibilities. 1. Standard Gross Up Clause: The most common type of Iowa Gross Up Clause used in an expense stop stipulated lease is the standard gross up clause. This clause allows the landlord to "gross up" the expense pools by including vacant space expenses or additional expenses in the calculations. This effectively increases the tenants' proportionate share of the expenses, even if the building is not fully occupied, preventing an unfair burden on those tenants currently occupying the premises. 2. Per Square Foot Gross Up Clause: Another variant of the Iowa Gross Up Clause is the per square foot gross up clause. Under this clause, the landlord allocates expenses based on the square footage occupied by each tenant. If a tenant leases a larger space, they will have a higher proportionate share of the overall expenses. This type of clause ensures that tenants with larger premises bear the appropriate financial burden for the increased usage and maintenance demands. 3. Percentage Gross Up Clause: The percentage gross up clause, another Iowa Gross Up Clause variation, assigns expenses based on a percentage determined by the gross leasable area (GLA) occupied by each tenant. This type of clause is commonly utilized in multi-tenant buildings where different spaces have varying lease sizes. The expenses are divided among the tenants based on their percentage of GLA, ensuring a fair distribution of costs. 4. Variable Gross Up Clause: A variable gross up clause is used in cases where the expenses incurred fluctuate over time. This type of clause allows the landlord to adjust the expense pools based on changes in operating costs, such as property taxes or insurance premiums. The variable gross up clause ensures that each tenant's financial responsibility accurately reflects the actual expenses incurred during a specific period. It is essential for both landlords and tenants to carefully review and negotiate the specific type of Iowa Gross Up Clause used in the lease agreement. The chosen clause should be tailored to the unique circumstances of the building, the tenancy types, and occupancy fluctuations. By incorporating an appropriate Iowa Gross Up Clause, landlords can safeguard against unfair allocation of expenses, while tenants can ensure transparency and equity in their financial obligations.The Iowa Gross Up Clause is an important provision used in commercial leases, specifically in the context of expense stops stipulated in a base or office net lease. This clause addresses the allocation of certain expenses incurred by the landlord and ensures fair and equitable distribution among the tenants. Understanding the different types of Iowa Gross Up Clauses is crucial for both landlords and tenants to ensure compliance and a clear understanding of financial responsibilities. 1. Standard Gross Up Clause: The most common type of Iowa Gross Up Clause used in an expense stop stipulated lease is the standard gross up clause. This clause allows the landlord to "gross up" the expense pools by including vacant space expenses or additional expenses in the calculations. This effectively increases the tenants' proportionate share of the expenses, even if the building is not fully occupied, preventing an unfair burden on those tenants currently occupying the premises. 2. Per Square Foot Gross Up Clause: Another variant of the Iowa Gross Up Clause is the per square foot gross up clause. Under this clause, the landlord allocates expenses based on the square footage occupied by each tenant. If a tenant leases a larger space, they will have a higher proportionate share of the overall expenses. This type of clause ensures that tenants with larger premises bear the appropriate financial burden for the increased usage and maintenance demands. 3. Percentage Gross Up Clause: The percentage gross up clause, another Iowa Gross Up Clause variation, assigns expenses based on a percentage determined by the gross leasable area (GLA) occupied by each tenant. This type of clause is commonly utilized in multi-tenant buildings where different spaces have varying lease sizes. The expenses are divided among the tenants based on their percentage of GLA, ensuring a fair distribution of costs. 4. Variable Gross Up Clause: A variable gross up clause is used in cases where the expenses incurred fluctuate over time. This type of clause allows the landlord to adjust the expense pools based on changes in operating costs, such as property taxes or insurance premiums. The variable gross up clause ensures that each tenant's financial responsibility accurately reflects the actual expenses incurred during a specific period. It is essential for both landlords and tenants to carefully review and negotiate the specific type of Iowa Gross Up Clause used in the lease agreement. The chosen clause should be tailored to the unique circumstances of the building, the tenancy types, and occupancy fluctuations. By incorporating an appropriate Iowa Gross Up Clause, landlords can safeguard against unfair allocation of expenses, while tenants can ensure transparency and equity in their financial obligations.
