Common use of Escalation Clause Clause in Contracts

Escalation Clause. If a rent rate change to Basic or Note Rate Rent is approved by Rural Development prior to the expiration of your lease, due to changes in project operating costs, your net contribution may be adjusted. Your tenant contribution may also be changed prior to the expiration of the lease due to changes in tenant status or failure to properly recertify. Form RD 3560-8, Tenant Certification, will be completed to document the changes in Net Tenant Contribution. The following conditions would not cause a change in the tenant’s Net Tenant Contribution: 1) Monetary or non-monetary default of the Owner. 2) Suspension, Cancellation, or Termination of Federal subsidies (Rental Assistance or Interest Credit) paid to the owner or management agent on behalf of the tenant. 3) Prepayment of the Agency loan by the Owner. 4) Foreclosure, liquidation, or acceleration of the Owner’s Promissory Note.

Escalation Clause. If a rent rate change to Basic or Note Rate Rent is approved by Rural Development prior to the expiration of your lease, due to changes in project operating costs, your net contribution may be adjusted. Your tenant contribution may also be changed prior to the expiration of the lease due to changes in tenant status or failure to properly recertify. Form RD 3560-8, Tenant Certification, will be completed to document the changes in Net Tenant Contribution. The following conditions would not cause a change in the tenant’s Net Tenant Contribution: 1) Monetary or non-monetary default of the Owner. 2) Suspension, Cancellation, or Termination of Federal subsidies (Rental Assistance or Interest Credit) paid to the owner or management agent on behalf of the tenant. 3) Prepayment of the Agency loan by the Owner. 4) Foreclosure, liquidation, or acceleration of the Owner’s Promissory Note.