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 Oregon Gross Up Clause is an important provision to include in an Expense Stop Stipulated Base or Office Net Lease. This clause ensures that the tenant is not burdened with unexpected expenses related to the operation and maintenance of the leased property. It is essential to understand the different types of Oregon Gross Up Clauses that should be used in such leases to protect the interests of both the landlord and the tenant. 1. Basic Gross Up Clause: This is the most common type of Oregon Gross Up Clause, which states that the landlord will bear the expenses related to real estate taxes, insurance, and common area maintenance (CAM) charges up to a certain amount. If the total expenses exceed this amount, the excess amount will be shared between the landlord and the tenant according to a predetermined ratio. 2. Proportional Gross Up Clause: This type of Oregon Gross Up Clause is more suitable for larger commercial properties with multiple tenants. It specifies that the total expenses should be divided proportionally based on the tenants' allocated share of the property. Each tenant will be responsible for their fair share of the expenses, ensuring a fair distribution of the financial burden. 3. Expense Reconciliation Gross Up Clause: This clause requires the landlord to provide an annual reconciliation statement to the tenant, detailing the actual expenses incurred for real estate taxes, insurance, and CAM charges. The tenant's share of these expenses will be adjusted accordingly, ensuring that they are not overcharged or burdened with unnecessary costs. 4. Expense Stop Gross Up Clause: This type of Oregon Gross Up Clause sets a cap or limit on the amount of expenses that the tenant is responsible for. If the expenses exceed the agreed-upon amount, the excess will be borne by the landlord. This clause provides the tenant with financial predictability and protects them from unforeseen increases in operating expenses. 5. Operating Expense Gross Up Clause: This clause allows the landlord to pass on any increases in operating expenses to the tenant. It specifies that if there is a rise in expenses such as utility costs, maintenance fees, or property management fees, the tenant must reimburse the landlord for their proportionate share of the increased expenses. Including an appropriate Oregon Gross Up Clause in an Expense Stop Stipulated Base or Office Net Lease is crucial for maintaining a fair and transparent financial arrangement between the landlord and the tenant. These clauses help to protect both parties from unexpected and unmanageable cost escalations and ensure a mutually beneficial leasing experience.The Oregon Gross Up Clause is an important provision to include in an Expense Stop Stipulated Base or Office Net Lease. This clause ensures that the tenant is not burdened with unexpected expenses related to the operation and maintenance of the leased property. It is essential to understand the different types of Oregon Gross Up Clauses that should be used in such leases to protect the interests of both the landlord and the tenant. 1. Basic Gross Up Clause: This is the most common type of Oregon Gross Up Clause, which states that the landlord will bear the expenses related to real estate taxes, insurance, and common area maintenance (CAM) charges up to a certain amount. If the total expenses exceed this amount, the excess amount will be shared between the landlord and the tenant according to a predetermined ratio. 2. Proportional Gross Up Clause: This type of Oregon Gross Up Clause is more suitable for larger commercial properties with multiple tenants. It specifies that the total expenses should be divided proportionally based on the tenants' allocated share of the property. Each tenant will be responsible for their fair share of the expenses, ensuring a fair distribution of the financial burden. 3. Expense Reconciliation Gross Up Clause: This clause requires the landlord to provide an annual reconciliation statement to the tenant, detailing the actual expenses incurred for real estate taxes, insurance, and CAM charges. The tenant's share of these expenses will be adjusted accordingly, ensuring that they are not overcharged or burdened with unnecessary costs. 4. Expense Stop Gross Up Clause: This type of Oregon Gross Up Clause sets a cap or limit on the amount of expenses that the tenant is responsible for. If the expenses exceed the agreed-upon amount, the excess will be borne by the landlord. This clause provides the tenant with financial predictability and protects them from unforeseen increases in operating expenses. 5. Operating Expense Gross Up Clause: This clause allows the landlord to pass on any increases in operating expenses to the tenant. It specifies that if there is a rise in expenses such as utility costs, maintenance fees, or property management fees, the tenant must reimburse the landlord for their proportionate share of the increased expenses. Including an appropriate Oregon Gross Up Clause in an Expense Stop Stipulated Base or Office Net Lease is crucial for maintaining a fair and transparent financial arrangement between the landlord and the tenant. These clauses help to protect both parties from unexpected and unmanageable cost escalations and ensure a mutually beneficial leasing experience.
