Operating Cost Increase Clause Samples
The Operating Cost Increase clause defines how additional expenses related to the operation of a property or business are managed between parties, typically in a lease or service agreement. This clause outlines the circumstances under which the landlord or service provider can pass on increased operating costs—such as utilities, maintenance, or taxes—to the tenant or client, often specifying calculation methods and notification requirements. Its core function is to allocate the financial risk of rising operational expenses, ensuring that the party responsible for payment is aware of and prepared for potential cost adjustments during the contract term.
Operating Cost Increase. If the Operating Costs for any calendar year or partial calendar year during the Term are greater than the Operating Costs for the Base Calendar Year set forth in Section 1.1 (or a prorated amount thereof for any partial calendar year), then Tenant shall pay to Landlord its Proportionate Share set forth in Section 1.1 of such excess, as the same may be adjusted in the event of a remeasurement or change in size of the Premises or Building. Operating Costs for the Base Calendar Year shall be adjusted to reflect an occupancy rate in the Building of ninety-five percent (95%). Landlord may from time to time reasonably estimate the amount due from Tenant under this Section with respect to any calendar year or portion thereof and, commencing no sooner than the first (1st) anniversary of the Term Commencement Date, Tenant shall pay periodically as Landlord may determine, but not more frequently than monthly, the amount of Landlord's estimate as rent with the next due payment of monthly Base Rent. Not later than one hundred twenty (120) days after the end of each calendar year, Landlord shall render Tenant a statement of Operating Costs for such calendar year and any amount due from Tenant or any credit due to Tenant hereunder. Payment by Tenant of any amount due shall be made as additional rent with Tenant's next due payment of monthly Base Rent (or, if the term of this Lease has ended, within ten (10) days of receipt of such statement), and Landlord shall credit the amount of any overpayment against subsequent obligations of Tenant under this clause (or refund such overpayment, if the term of this Lease has ended and Tenant has no further obligations to Landlord). Failure by Landlord to deliver such statement within the one hundred twenty (120) day period does not relieve Tenant of its obligation to pay the charges described herein; provided, however, that in the event that Landlord fails to furnish Tenant with such statement within two (2) years after the end of any calendar year, then Tenant shall not be required to pay Tenant's Proportionate Share of any increase in Operating Costs for that calendar year.
(a) Such books and records shall be made available to Tenant at the offices where Landlord keeps the same during normal business hours.
(b) Tenant shall have the right to make such examination no more than once in respect of any period in which Landlord has given Tenant a statement of the actual amount of Operating Costs.
(c) Any request for examination in re...
Operating Cost Increase. In the event the Estimated Operating Cost for any calendar year during the Lease Term exceeds the Base Operating Cost, Tenant agrees to pay to Landlord on the first day of the month following receipt of a statement therefor and monthly thereafter an amount which is equal to one-twelfth (1/12) of Tenant's Share of the excess amount.
Operating Cost Increase. In order to reflect Tenant's agreed upon portion of the cost to Landlord (and increases thereto) for the operation, cleaning, repair, safety, replacement, management, security and maintenance of the Real Property, the Building and the Building Systems, sidewalks, curbs, plazas and other areas adjacent to the Building with respect to the services provided to tenants of the Building, commencing on the first (1st) anniversary of the Commencement Date, and to occur on each subsequent anniversary of the Commencement Date throughout the Term, the Minimum Rent payable by Tenant shall be increased by two and one half (2 1/2%) percent on a compounded basis, which shall be calculated by multiplying the Minimum Rent then payable by Tenant (as previously escalated pursuant to this Subsection E, and including any fixed increases) by two and one half (2 1/2%) percent, the product of which shall be added to the Minimum Rent then payable by Tenant (as previously escalated pursuant to this Subsection E, and including any fixed increases), and the resulting sum of which shall be the Minimum Rent payable by Tenant under this Lease until the next anniversary of the Commencement Date. As used in this Subsection E, the term "Minimum Rent" shall exclude the Electricity Factor.
Operating Cost Increase. As used in this Paragraph: (A) “
Operating Cost Increase. In order to reflect Tenant’s agreed upon portion of the cost to Landlord (and increases thereto) for the operation, cleaning, repair, safety, replacement, management, security and maintenance of the Real Property, the Building and the Building Systems, sidewalks, curbs, plazas and other areas adjacent to the Building with respect to the services provided to tenants of the Building, commencing on the first (1st) anniversary of the Commencement Date, and to occur on each subsequent anniversary of the Commencement Date throughout the Term, the Minimum Rent payable by Tenant shall be increased by two and one-half (2.5%) percent on a compounded basis, which shall be calculated by multiplying the Minimum Rent then payable by Tenant (as previously escalated pursuant to this Subsection E, and including any fixed increases) by two and one-half (2.5%) percent, the product of which shall be added to the Minimum Rent then payable by Tenant (as previously escalated pursuant to this Subsection, and including any fixed increases), and the resulting sum of which shall be the Minimum Rent payable by Tenant under this Lease until the next anniversary of the Commencement Date.
Operating Cost Increase. Subsequent to 1997 and for each year thereafter, based upon square footage occupied, Tenant shall be responsible for its pro-rata share of building operating cost increases, if any, such as increases in the cost, expense, charges or rents for building utilities, janitorial and service contracts, waste disposal services or charges, building management and the like. Increases preceding billing shall be due and payable within 20 days of billing by Landlord. Prospective increases shall be prorated monthly over the balance of the year. Failure or refusal to make timely payment of said increases shall constitute a default and be the equivalent of the failure or refusal to pay rent.