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 Nevada Gross Up Clause is an important provision that should be included in an Expense Stop Stipulated Base or Office Net Lease. This clause specifically addresses the issue of operating expenses within the lease agreement. Here is a detailed description of the Nevada Gross Up Clause and its different types: 1. Definition of Nevada Gross Up Clause: The Nevada Gross Up Clause is a provision added to a commercial lease agreement governing operating expenses in Nevada. Its purpose is to ensure that the tenant is not burdened with an unfair share of expenses incurred by the landlord or property owner. 2. Basic Nevada Gross Up Clause: The basic Nevada Gross Up Clause states that if the total operating expenses for the property, excluding property taxes, exceed a certain amount (known as the Expense Stop), the landlord is responsible for bearing the excess expenses. This prevents the tenant from being responsible for disproportionately high operating costs. 3. Expense Stop Stipulated Base Lease: In this type of lease, the Nevada Gross Up Clause will specify a base year for calculating operating expenses. The base year will be used as a reference to determine if the expenses exceed the Expense Stop set in the lease agreement. If the expenses exceed the Expense Stop, the landlord will be responsible for paying the excess costs. 4. Office Net Lease: In an Office Net Lease, the Nevada Gross Up Clause will typically require the landlord to bear a certain percentage of the excess operating expenses. This percentage is often based on the tenant's percentage of total occupied space in the building. For example, if the tenant occupies 50% of the building, the landlord may be responsible for 50% of the excess expenses. 5. Gross Up Methodology: The Nevada Gross Up Clause may also specify the methodology to be used for grossing up the expenses. This methodology determines how the expenses should be calculated to account for vacant units or spaces within the property. The purpose is to ensure that the tenant does not bear the burden of vacant space when calculating operating expenses. In conclusion, the Nevada Gross Up Clause is a crucial provision that should be included in an Expense Stop Stipulated Base or Office Net Lease. It protects tenants from shouldering an unfair share of operating expenses and ensures a fair distribution of costs between the landlord and tenant. Properly drafting and incorporating a Nevada Gross Up Clause can help maintain a healthy landlord-tenant relationship and avoid any disputes related to operating expense allocation.The Nevada Gross Up Clause is an important provision that should be included in an Expense Stop Stipulated Base or Office Net Lease. This clause specifically addresses the issue of operating expenses within the lease agreement. Here is a detailed description of the Nevada Gross Up Clause and its different types: 1. Definition of Nevada Gross Up Clause: The Nevada Gross Up Clause is a provision added to a commercial lease agreement governing operating expenses in Nevada. Its purpose is to ensure that the tenant is not burdened with an unfair share of expenses incurred by the landlord or property owner. 2. Basic Nevada Gross Up Clause: The basic Nevada Gross Up Clause states that if the total operating expenses for the property, excluding property taxes, exceed a certain amount (known as the Expense Stop), the landlord is responsible for bearing the excess expenses. This prevents the tenant from being responsible for disproportionately high operating costs. 3. Expense Stop Stipulated Base Lease: In this type of lease, the Nevada Gross Up Clause will specify a base year for calculating operating expenses. The base year will be used as a reference to determine if the expenses exceed the Expense Stop set in the lease agreement. If the expenses exceed the Expense Stop, the landlord will be responsible for paying the excess costs. 4. Office Net Lease: In an Office Net Lease, the Nevada Gross Up Clause will typically require the landlord to bear a certain percentage of the excess operating expenses. This percentage is often based on the tenant's percentage of total occupied space in the building. For example, if the tenant occupies 50% of the building, the landlord may be responsible for 50% of the excess expenses. 5. Gross Up Methodology: The Nevada Gross Up Clause may also specify the methodology to be used for grossing up the expenses. This methodology determines how the expenses should be calculated to account for vacant units or spaces within the property. The purpose is to ensure that the tenant does not bear the burden of vacant space when calculating operating expenses. In conclusion, the Nevada Gross Up Clause is a crucial provision that should be included in an Expense Stop Stipulated Base or Office Net Lease. It protects tenants from shouldering an unfair share of operating expenses and ensures a fair distribution of costs between the landlord and tenant. Properly drafting and incorporating a Nevada Gross Up Clause can help maintain a healthy landlord-tenant relationship and avoid any disputes related to operating expense allocation.
