"Additional Rent" And A Tenant’s "Proportionate Share"

Most commercial leases contain terms that require tenants to pay additional rent. Additional rent is usually a share of the costs and charges incurred to operate the property. These costs can include municipal taxes, insurance premiums, repair and maintenance costs and common area utility charges. In any given year, these charges change and fluctuate.  Landlords often provide an annual estimate which tenants pay subject to a year-end reconciliation. Lease terms governing these types of costs are often general in nature because it is not possible to contemplate all the variables and, at the same time, have the same additional rent provision apply to all the tenants in a commercial building.