Base Year

One important lease provision that any tenant should be aware of is the provision that sets forth various types of "additional rent" the tenant will be responsible for. It goes without saying that tenant's additional rent payments are important to understand because these types of cash outflows can inherently affect your bottom line. There are a variety of different landlord methods for charging these various costs. Take property taxes for example; some landlords require tenants to pay their "pro rata share" of any increase in taxes over the tax base year, while some landlords require the tenants to pay their pro rata share for the entire tax bill. If the building is of the nature that one tenant occupies the entire building, then it is likely that the tenant will be responsible for the entire tax payment.