Regarding lease space does the following mean that the Lessor must adjust the base operating expense?

Question

"Operating EXpenses: in the event Lessor's operating expense for the building / project of which leased premises are a part shall, in any calendar year during the term of this lease, exceed the sum of $3.15 per square foot, lesses agrees to pay as additional rent Lesse's pro rata share of such excess operating expenses. Lessor may invoice Lesse monthly for Lesse's pro rata share of the estimated operating expenses for each calendar year, which amount shall be adjusted each year based upon anticipated operating expenses."

My base operating expense indicated on my lease contract is
$ 3.15 per square foot, but now the lessor states the past year's base operating expense was actually $5.67 a difference of $2.52 and I must pay the difference. the contract was extended in July of 2005. Can some one please clarify, does this refer to adjusting the rent or the base operating expense?

Answer 1

It is adjusting the amount of the rent. The lease says that you agree to pay X in rent, but should the cost of the landlord's providing you the space exceed $3.15 per foot, you have to pay $2.52 extra per square foot you use.

Sounds like a very strange lease agreement if you ask me. I don't understand where the extra expense came from. Is the landlord providing the utilities or something?

Without seeing the whole lease, I would have to tell you to consult a lawyer. This could be onerous language that the court would not enforce. However, since it is a commercial lease, it could be standard language in your area. I just have never heard of this type of language in a lease.

Good Luck