Operating Cost Clause Samples
The Operating Cost clause defines the expenses that are incurred in the day-to-day functioning and maintenance of a property or business, which are typically passed on to tenants or shared among parties. This clause outlines what specific costs are included, such as utilities, repairs, maintenance, management fees, and sometimes insurance or taxes, and may detail how these costs are calculated and allocated. Its core practical function is to ensure transparency and fairness in the distribution of ongoing operational expenses, preventing disputes by clearly specifying financial responsibilities.
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Operating Cost. Operating costs shared by the building are: (Check one)
Operating Cost. Indicate whether or not the base rent includes any portion of the building’s operating costs. If not, state the monthly amount the tenant must pay for a proportionate share of the operating expenses. Specify the maximum percentage of the total operational costs for the tenant’s share and the percentage of the expenses reserved for significant repairs and renovations. If the tenant underpays their share of the operating expenses, specify the days the tenant must pay the amount due. Step 6 – Choose the Tax Option 13.
Operating Cost. (a) Operating Cost shall mean all expenses and costs of every kind and nature incurred by Landlord in its reasonable business judgment which Landlord shall pay or become obligated to pay because of or in connection with the management, maintenance, preservation or operation of the Building (determined in accordance with generally accepted accounting principles, consistently applied) including, but not limited to the following:
(1) Expenses of the operation, maintenance and security of the Building, including compensation in the form of wages, salaries, and other compensation and benefits (including payroll taxes, federal, state and local unemployment taxes and social security taxes), insurance, welfare and retirement benefits, and related expenses and benefits of all on-site employees (not exceeding the level of property manager) and off-site employees (but only to the extent such employees are involved directly in the operation, maintenance, management and preservation of the Building, and with respect to off-site employees above the level of the property manager directly responsible for the Building, only so long as ▇▇▇▇▇ Interests Limited Partnership or an affiliate thereof is managing the Building; it being agreed that the manner in which Landlord allocates the expenses for such off-site employees and categories to which such expenses are allocated will not change from the manner utilized by Landlord as of the date of this Lease and Landlord agrees to certify that such manner and categories have not changed (the “Allocable Share Certification”) in connection with the delivery by Landlord to Tenant of the statement of the Operating Cost and Impositions pursuant to Section 2.06) but excluding employees and other personnel to the extent they are engaged in the initial development and construction of the Building;
(2) The Building’s allocable share of the cost incurred by Landlord in Greater Boston for Landlord’s office and management office operation for the Building (provided, however, that if such office is located outside the Project, such allocable share shall not exceed the allocable share of the cost which would have been incurred had the office been located within the Project);
(3) All tools, supplies materials and equipment used in the operation and maintenance of the Building (the “Building Equipment”), including rental fees for the same, if such items are not purchased and amortized, or, if Landlord in its reasonable business judgement determine...
Operating Cost. (a) Operating Cost shall mean all expenses and costs of every kind and nature which Landlord shall pay or become obligated to pay because of or in connection with the management, maintenance, preservation or operation of the Building (determined in accordance with generally accepted accounting principles, consistently applied) including, but not limited to the following:
(1) Expenses of the operation, maintenance and security of the Building, including compensation in the form of wages, salaries, and other compensation and benefits (including payroll taxes, federal, state and local unemployment taxes and social security taxes, insurance, welfare and retirement benefits, and related expenses and benefits of all on-site and off-site employees [to the extent involved in the management, maintenance and operation of the Building], reasonably pro-rated to reflect services provided for the Building and other building(s));
(2) Cost for Landlord’s office and management office operation for the Building, including the actual cost (or, in the absence of a specific rent charge, the fair market rent) of any space occupied by entities providing management or building services for the Building, reasonably prorated between the Building and the building at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇;
(3) All tools, supplies, materials and equipment used in the operation and maintenance of the Building (reasonably pro-rated to reflect services provided for the Building and other building(s)), including rental fees for the same, if such items are not purchased and amortized pursuant to (10) below;
(4) Utilities, including electricity, water, sewer, gas, communication, heating, lighting, air conditioning and ventilating, for the entire Building;
(5) All maintenance, janitorial and service agreements and costs for the Building, including, without limitation, alarm service, landscaping, window cleaning, escalator and elevator maintenance, rubbish and snow removal, pest control, equipment maintenance or servicing or maintenance or cleaning for sidewalks, Building exterior, roof and service areas;
(6) A management fee in connection with the operation of the Building; provided, however, that the share of such cost included in Tenant’s Operating Cost under this Lease shall be separately calculated and equal three percent (3%) of all Rent under this Lease, excluding such fee, and that such share shall be in lieu of Tenant’s Proportionate Share of the management fee for the entire Building;
(7) Legal and ac...
Operating Cost. The following portion of Operating Costs shall be allocated to the
Operating Cost. (i) Prior to the Commencement Date and prior to each calendar year thereafter Landlord shall compute and deliver to Tenant a good faith estimate of the Operating Cost for such calendar year and the monthly payments as would fully recover the estimated Operating Cost in such calendar year. If at any time in such calendar year there is a material change in Landlord's estimate of the Operating Cost, Landlord may compute and deliver to Tenant an updated statement. The estimated Operating Cost shall be paid by Tenant to Landlord in advance and without further notice on or before the Commencement Date and on or before the first day of each calendar month thereafter during the Term in monthly installments, each based on Landlord's most current statement. If the Commencement Date falls on other than the first day of a month, the payment of the estimated Operating Cost for the first month of the Initial Term shall be pro-rated.
(ii) Within a reasonable period after the end of each calendar year, Landlord shall give written notice to Tenant of the actual Operating Cost for that calendar year. If the actual Operating Cost for any calendar year during the Term exceeds the estimated Operating Cost paid by Tenant for the calendar year, Tenant shall pay to Landlord a sum equal to the difference between the actual Operating Cost for the year and the estimated Operating Cost paid by Tenant for the year. If the estimated Operating Cost paid by Tenant for any calendar year during the Term exceeds the actual Operating Cost for the calendar year, Landlord shall pay to Tenant a sum equal to the difference between the estimated Operating Cost paid by Tenant for the year and the actual Operating Cost for the year. Tenant shall pay to Landlord any amount due under this Section within 30 days after delivery of the annual notice, but failure to so notify Tenant within a reasonable period after any calendar year for which any amount is due shall not release Tenant from paying nor diminish Tenant's obligation to pay such amount. At Tenant's option, Landlord shall pay Tenant any amount due under this Article within 30 days after delivery of the annual notice or credit such amount against the next payments coming due under this Lease. If this Lease does not begin or end at the first day of a calendar year, the amount payable for any such Operating Cost adjustment will be adjusted accordingly.
(iii) Tenant may at Tenant's cost examine Landlord's books relating to the Operating Cost if re...
Operating Cost. During the Term of the Lease, the Tenant shall pay to the Landlord in the manner set forth in this section the Tenant's Share of the Operating Cost (and where applicable, the Tenant's Particular Share, allocated pursuant to section 8.08 to that portion of the Building in which the Leased Premises are located). Prior to the commencement of the Term of this Lease and the commencement of each fiscal period selected by the Landlord thereafter which commences during the Term, the Landlord shall estimate the amount of Operating Cost for the ensuing fiscal period or (if applicable) broken portion thereof, as the case may be, and notify the Tenant in writing of such estimate. The Operating Cost in any fiscal period shall be an amount equal to the aggregate of all Operating Costs for that fiscal period. The Landlord may from time to time alter the fiscal period selected, in which case, and in the case where only a broken portion of a fiscal period is included within the Term, the appropriate adjustment in monthly payments shall be made. From time to time during a fiscal period the Landlord may re-estimate the amount of Operating Cost in which event the Landlord shall notify the tenant in writing of such re-estimate and fix monthly instalments for the then remaining balance of such fiscal period or broken portion thereof such that, after giving credit for instalments paid by the Tenant on the basis of the previous estimate or estimates, the
Operating Cost. Operating cost means expenses incurred by an institution in serving meals to participants under the Program, and allowed by the state agency guidance and financial management instructions.
Operating Cost. The cost of the operating portion of the expense of operating work as specified in the Eldorado System Operating Agreement.