Operating Expense Cap Clause Samples
An Operating Expense Cap clause sets a maximum limit on the amount of operating expenses that can be charged to a tenant or party under a contract, typically in commercial leases. This cap may apply to specific categories of expenses or to the total annual increase in operating costs, ensuring that tenants are protected from unexpected or excessive increases in costs such as maintenance, utilities, or property management fees. By establishing a clear ceiling on these expenses, the clause provides predictability and financial stability for the party responsible for payment, addressing the risk of fluctuating or escalating operating costs.
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Operating Expense Cap. The Specified Expenses paid by the Fund will be capped at (u) 0.10% with respect to any Capital Account established prior to August 1, 2025 or (v) 0.25% with respect to any other Capital Account, of the Fund’s Net Asset Value per year. The Investment Manager (or one or more of its Affiliates) may elect to pay certain of the Operating Expenses on the Fund’s behalf (each such payment, an “Expense Advance”). Following any calendar month in which the Specified Expenses are below 0.25% of the Fund’s Net Asset Value at the end of such calendar month on an annualized basis, the Fund shall reimburse the Investment Manager (or the applicable Affiliates(s)), fully or partially, for the Expense Advance, but only if and to the extent that Specified Expenses plus any Reimbursement Payments do not exceed (w) 0.10% with respect to any Capital Account established prior to August 1, 2025 or (x) 0.25% with respect to any other Capital Account, of the Fund’s Net Asset Value at the end of such calendar month on an annualized basis, until such time as all Expense Advances made by the Investment Manager (or the applicable Affiliate(s)) to the Fund within (y) one year with respect to any Capital Account established prior to August 1, 2025 or (z) three years with respect to any other Capital Account, prior to the last business day of such calendar month have been reimbursed. Any payments required to be made by the Fund in the prior sentence shall be referred to herein as a “Reimbursement Payment.” The General Partner may use any such methodology to calculate: (i) the cap on Specified Expenses, (ii) any Expense Advance and (iii) any Reimbursement Payment as the General Partner, in its sole discretion, deems necessary to give effect to this provision.
Operating Expense Cap. (i) Notwithstanding anything to the contrary set forth in this Article, the Controllable Operating Expenses used for computing Tenant’s Prorata Share of Operating Expenses for any calendar year during the Term shall not exceed an amount equal to the Controllable Operating Expense Cap for such calendar year, which is 105% times the amount of the Controllable Operating Expenses taken into account in determining Tenant’s Prorata Share of Operating Expenses for the immediately prior calendar year plus the amount of the unused Controllable Operating Expense Cap, if any, for such prior calendar year. For purposes of this clause (H), the following terms have the meanings specified below: (1) “
Operating Expense Cap. Except for real property taxes, insurance premiums, management fees and utility charges (including, but not limited to, electricity, fuel, water, sewer, gas, etc.) the full pro rata share of which excess operating expenses Lessee shall pay as stated in sections 2.02 and 2.03 of this Lease, Lessor agrees that Lessee shall not pay, as its pro rata share of such excess operating expenses related to the remaining operating expenses described in said sections 2.02 and 2.03, an amount which is greater than one hundred eight percent (108%) of the amount of said remaining excess operating expenses paid by Lessee for the next previous year provided further that Lessee shall pay the full amount of its pro rata share of said remaining excess operating expenses arising during the first year of this Lease.
Operating Expense Cap. Notwithstanding anything to the contrary set forth in this Section 6, for the purposes of calculating Tenant's Percentage of Operating Expenses, "Controlled Expenses" (as hereinafter defined) shall not exceed the "Maximum Controlled Expenses" (as hereinafter defined). "Controlled Expenses" shall mean all Operating Expenses except those attributable to Real Property Taxes and Assessments, costs of insurance, including, without limitation, liability insurance, casualty insurance, worker's compensation insurance, and business interruption insurance, costs of utilities, and costs of compliance with any laws, rules or regulations. "Maximum Controlled Expenses" shall mean: (a) for calendar year 2000, the full amount of the actual expenses for Controlled Expenses as determined in accordance with the foregoing provisions; (b) for calendar year 2001 and each calendar year thereafter, the prior calendar year's Maximum Controlled Expenses multiplied by 1.
Operating Expense Cap. Notwithstanding anything in the Lease to the contrary, in no event shall Controllable Operating Expenses for any year during the Initial Term increase by more than 5% in excess of Controllable Operating Expenses for the immediately preceding year, on a compounding and cumulative basis. However, any increases in Operating Expenses not recovered by Landlord due to the foregoing limitation shall be carried forward into succeeding years during the Term (subject to the foregoing limitation) until fully recouped by Landlord. [For example, if Controllable Operating Expenses were $100.00 in 2012, then the total Controllable Operating Expenses that could be included in Operating Expenses in 2013 would be $105.00, for 2014 the amount would be $110.25, for 2015 the amount would be $115.76, and so on. In the preceding example, if Controllable Operating Expenses in both 2014 and 2015 were $112.00, then Landlord could include only $110.25 in Operating Expenses in 2014, but $113.75 (the Controllable Operating Expenses plus the carry-forward from 2014) in 2015.] “Controllable Operating Expenses” shall mean all Operating Expenses, excluding those Operating Expenses that in Landlord’s sole discretion and judgment may be subject to increases which are outside of Landlord’s control such as (but not limited to) utility expenses, snow removal expenses, insurance premiums, major repairs, security costs, janitorial costs, costs governed by collective bargaining, costs incurred due to requirements of Law or insurance carriers, the cost of employee benefits provided by Landlord to all Building personnel or costs incurred due to casualty or condemnation. At no time shall there be any cap on Taxes.
Operating Expense Cap. Despite anything in this Section 3.2 to the contrary, Sublandlord agrees that on an annual basis (commencing January 1, 2002) Subtenant’s Share of Common Area Operating Expenses and Subtenant’s Share of Building Operating Expenses (sometimes hereinafter collectively referred to as “Operating Expenses”) exclusive of any increases in Real Property Taxes (as defined in Section 10.1 of the Master Lease) shall not increase by more than six percent (6%) per annum over Subtenant’s share of such Operating Expenses payable by Subtenant for the immediately preceding calendar year.
Operating Expense Cap. Beginning in the year following the first year in which the Building is at least 90% occupied, Tenant’s Pro Rata Share of the Building’s Operating Expenses consisting of “Controllable Operating Expenses” (as hereinafter defined) shall not increase from one (1) calendar year to the next by more than five percent (5%) of the prior year’s Operating Expenses. The base year shall be the year in which 90% Building occupancy has been achieved and the Controllable Operating Expenses shall be annualized and Grossed-Up (based upon 100% occupancy). “Controllable Operating Expenses” shall mean all Operating Expenses, except for insurance premiums, utilities, all taxes including, without limitation, real estate taxes, personal property taxes and other governmental assessments and impositions, snow removal and non-recurring costs not within Landlord’s reasonable control that are not otherwise excluded from the definition of Operating Expenses. In no event shall there be any annual limit on increases to Tenant’s Proportionate Share of Operating Expenses which are not Controllable Operating Expenses.
Operating Expense Cap. Notwithstanding anything to the contrary set forth in this Lease, when determining Tenant's pro rata share of excess operating expenses for lease years subsequent to the first lease year, operating expenses may not increase more than fifteen percent (15%) from the immediately preceding lease year. Provided, the foregoing cap on operating expenses shall not apply to taxes and insurance. Tenant's pro rata share of the excess of these expenses shall always be based on the actual amount of such expenses.
Operating Expense Cap. Tenant’s Proportionate Share of Operating Expenses consisting of “Controllable Operating Expenses” (as hereinafter defined) shall not increase from one (1) calendar year to the next by more than ten percent (10%) per calendar year during the initial Term of this Lease on a cumulative basis utilizing the estimated Operating Expenses for 2008 as the base year amount. “Controllable Operating Expenses” shall mean all Operating Expenses, except for insurance premiums, all taxes which are Operating Expenses under this Lease including, without limitation, real estate taxes, personal property taxes and other governmental assessments and impositions, any windstorm restoration costs not covered by insurance, and costs of fuel consumption in connection with the use of the Generator. In no event shall there be any annual limit on increases to Tenant’s Proportionate Share of Operating Expenses which are not Controllable Operating Expenses. In the event Tenant extends the Term of this Lease beyond the initial term hereof, the base amount for purposes of calculating Tenant's Proportionate Share of Operating Expenses shall be the actual operating expenses for the first year of the extended Term, subject to the ten (10%) percent cumulative cap on Controllable Operating Expenses through the remainder of the extended Term. Additionally, any expenses deferred because of construction warranties (i.e. HVAC service contracts, elevator service contracts, fire/security service contracts, etc.) will be added back to the Operating Expenses prior to determining whether or not the controllable Operating Expense cap has been exceeded.
Operating Expense Cap. This Lease Rider is attached to and made a part of that certain Standard Form Lease dated May 14, 1996, by and between RCDC Associates L.P., a California limited partnership, as "Landlord", and Jenn▇ ▇▇▇▇▇ ▇▇▇ducts, Inc., a California corporation, as "Tenant", for the Premises known as 1133▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇. The capitalized terms used and not otherwise defined herein shall have the same definitions as set forth in the Lease. The provisions of this Lease Rider shall supersede any inconsistent or conflicting provisions of the Lease. Notwithstanding anything to the contrary contained in Section 7.1 of the Lease, provided no Event of Default has occurred and is continuing, (a) for the first twelve (12) months of the Term, Tenant's Share of Operating Expenses and Taxes (exclusive of insurance and Capital Improvements) shall not exceed five percent (5%) per annum, compounded, for each succeeding year of the initial Term of the Lease only. Tenant acknowledges and agrees that Tenant shall be responsible for Tenant's Share of all increases in Capital Improvements and insurance occurring after the twelfth (12th) month of the Term. LIMITATIONS ON LANDLORD'S RIGHT TO SELF-HELP This Lease Rider is attached to and made a part of that certain Standard Form Lease dated May 14, 1996, by and between RCDC Associates L.P., a California limited partnership, as "Landlord", and Jenn▇ ▇▇▇▇▇ ▇▇▇ducts, Inc., a California corporation, as "Tenant", for the Premises known as 1133▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇. The capitalized terms used and not otherwise defined herein shall have the same definitions as set forth in the Lease. The provisions of this Lease Rider shall supersede any inconsistent or conflicting provisions of the Lease. TO BE ADDED TO THE END OF SECTION 9.4: Notwithstanding the foregoing, if the nature of any required repair or maintenance is such that more than ten (10) days is required for its performance, then so long as no other Event of Default has occurred and is continuing and no emergency or other condition exists which poses a threat of damage or injury to persons or property if left uncorrected, Landlord shall not enter upon the Premises for the purpose of performing such repair or maintenance if Tenant commences such performance within ten (10) days from the date on which Landlord makes written demand on Tenant to effect such repair or maintenance and Tenant thereafter diligently and continuously prosecutes the s...