This office lease clause should be used in a base year lease. This form states that 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 in accordance with industry standards of the building operating costs. This amount shall be deemed to be the amount of building operating costs for the year.
The Collin Texas Gross Up Clause, also known as the Gross up Provision, is an essential component commonly included in base year leases in the region. It serves as a mechanism to ensure fairness and accuracy in determining rental expenses related to operating costs and taxes throughout the lease term. This clause allows for the adjustment of tenant's lease payments based on changes in the building's operating expenses, specifically property taxes and operating costs. There are primarily two types of Collin Texas Gross Up Clauses that should be considered when drafting a base year lease: 1. Taxes Gross Up Clause: This type of gross-up provision focuses on property taxes. As property taxes tend to fluctuate over time, this clause ensures that the tenant's rent is adjusted accordingly to accommodate any increases. The clause often outlines a specific methodology for determining the amount of the gross-up adjustment, which can be based on factors like the actual taxes paid, the percentage increase in taxes, or other predetermined formulas. 2. Operating Costs Gross Up Clause: This gross-up provision specifically addresses fluctuations in operating costs associated with the leased property. It allows the landlord to adjust the tenant's rent to reflect any increase in expenses such as utilities, maintenance, insurance, or common area maintenance fees. Similar to the taxes gross-up clause, this provision may utilize established formulas or specified benchmarks to calculate the amount of adjustment. Overall, the Collin Texas Gross Up Clause is crucial for both landlords and tenants in ensuring a fair and equitable arrangement throughout the lease term. It promotes transparency and helps maintain a stable financial framework by accounting for changes in property taxes and operating costs.The Collin Texas Gross Up Clause, also known as the Gross up Provision, is an essential component commonly included in base year leases in the region. It serves as a mechanism to ensure fairness and accuracy in determining rental expenses related to operating costs and taxes throughout the lease term. This clause allows for the adjustment of tenant's lease payments based on changes in the building's operating expenses, specifically property taxes and operating costs. There are primarily two types of Collin Texas Gross Up Clauses that should be considered when drafting a base year lease: 1. Taxes Gross Up Clause: This type of gross-up provision focuses on property taxes. As property taxes tend to fluctuate over time, this clause ensures that the tenant's rent is adjusted accordingly to accommodate any increases. The clause often outlines a specific methodology for determining the amount of the gross-up adjustment, which can be based on factors like the actual taxes paid, the percentage increase in taxes, or other predetermined formulas. 2. Operating Costs Gross Up Clause: This gross-up provision specifically addresses fluctuations in operating costs associated with the leased property. It allows the landlord to adjust the tenant's rent to reflect any increase in expenses such as utilities, maintenance, insurance, or common area maintenance fees. Similar to the taxes gross-up clause, this provision may utilize established formulas or specified benchmarks to calculate the amount of adjustment. Overall, the Collin Texas Gross Up Clause is crucial for both landlords and tenants in ensuring a fair and equitable arrangement throughout the lease term. It promotes transparency and helps maintain a stable financial framework by accounting for changes in property taxes and operating costs.
