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 Harris Texas Gross up Clause is a crucial element that should be incorporated into the Base Year Lease to ensure fair and accurate calculations of certain expenses. This clause is meant to adjust the tenant's share of expenses to reflect an ideal occupancy level, even if the actual occupancy falls below that level. By implementing this clause, the landlord protects themselves from potential financial burdens caused by vacancies or low occupancy rates. There are two main types of Harris Texas Gross up Clauses that can be utilized in a Base Year Lease: 1. Full Building Gross up Clause: This type of clause is commonly used in commercial leases where the entire building or property is occupied by a single tenant. With this clause, the tenant is responsible for bearing their proportionate share of expenses based on the assumed ideal occupancy level of the building, regardless of the actual occupancy. The landlord "grosses up" the expenses to estimate the costs that would be incurred if the building were fully occupied. 2. Multiple Tenant Gross up Clause: This clause is applicable in situations where a property has multiple tenants. Each tenant pays a share of the common area expenses based on their occupied square footage. In this case, the Harris Texas Gross up Clause ensures that each tenant's share is calculated assuming that the entire property is fully occupied. This protects the landlord and ensures that the expenses are evenly distributed amongst the tenants, even if some spaces are vacant or unoccupied. In a Base Year Lease, the Harris Texas Gross up Clause is essential as it helps maintain fairness and prevents any undue financial burden on either party. It provides a standardized method for adjusting expenses and ensures that tenants contribute a reasonable amount, regardless of occupancy rates. This clause, significantly beneficial to landlords, should be incorporated into lease agreements to ensure transparent and equitable cost allocation.The Harris Texas Gross up Clause is a crucial element that should be incorporated into the Base Year Lease to ensure fair and accurate calculations of certain expenses. This clause is meant to adjust the tenant's share of expenses to reflect an ideal occupancy level, even if the actual occupancy falls below that level. By implementing this clause, the landlord protects themselves from potential financial burdens caused by vacancies or low occupancy rates. There are two main types of Harris Texas Gross up Clauses that can be utilized in a Base Year Lease: 1. Full Building Gross up Clause: This type of clause is commonly used in commercial leases where the entire building or property is occupied by a single tenant. With this clause, the tenant is responsible for bearing their proportionate share of expenses based on the assumed ideal occupancy level of the building, regardless of the actual occupancy. The landlord "grosses up" the expenses to estimate the costs that would be incurred if the building were fully occupied. 2. Multiple Tenant Gross up Clause: This clause is applicable in situations where a property has multiple tenants. Each tenant pays a share of the common area expenses based on their occupied square footage. In this case, the Harris Texas Gross up Clause ensures that each tenant's share is calculated assuming that the entire property is fully occupied. This protects the landlord and ensures that the expenses are evenly distributed amongst the tenants, even if some spaces are vacant or unoccupied. In a Base Year Lease, the Harris Texas Gross up Clause is essential as it helps maintain fairness and prevents any undue financial burden on either party. It provides a standardized method for adjusting expenses and ensures that tenants contribute a reasonable amount, regardless of occupancy rates. This clause, significantly beneficial to landlords, should be incorporated into lease agreements to ensure transparent and equitable cost allocation.
