Common use of Utilities and Operating Expenses Clause in Contracts

Utilities and Operating Expenses. For large commercial properties it is often impossible to have a reading on the day of closing and a perfect true- up of expenses. The contract should include a provision that the intent of the parties is that the buyer be responsible for costs and expenses after closing while the seller be responsible for such expenses prior to closing. This type of provision can require a true-up by the parties if after closing a significant unfairness is discovered (e.g., prepayment of utilities).