EXCEPTIONAL EXPENDITURE Clause Samples
The Exceptional Expenditure clause defines how costs that are unusual, unforeseen, or significantly higher than normal are to be handled under an agreement. Typically, this clause outlines the process for identifying such expenditures, sets thresholds or criteria for what qualifies as exceptional, and may require prior approval or notification before incurring these costs. Its core practical function is to ensure that both parties are aware of and agree on how extraordinary expenses are managed, thereby preventing disputes and maintaining budgetary control.
EXCEPTIONAL EXPENDITURE. 5.1 If during any Accounting Period the Landlord shall be required to incur or actually incurs heavy or exceptional unanticipated expenditure which forms part of the Service Costs, the Landlord shall be entitled to recover from the Tenant a fair and reasonable proportion (as the Landlord or the Landlord through the Landlord’s surveyor (acting reasonably) shall from time to time notify in writing to the Tenant or state in the Certificate) of the whole of that expenditure on the Quarter Day next following.
5.2 If funds collected by way of Advance Payments under paragraph 4 prove insufficient to meet an unanticipated immediate liability (and there is no reserve fund available or which may be applied to meet the liability), the Landlord may at its reasonable discretion raise money at an open market rate by way of loan or overdraft for the purposes of defraying Service Costs but not if the reason why the Landlord requires such money is as a consequence of default by a tenant of the Building other than the Tenant.
EXCEPTIONAL EXPENDITURE. 4.1 If the Landlord is required to incur or actually incurs heavy or exceptional expenditure which forms part of the Landlord’s Costs the Landlord will be entitled to recover from the Tenant the Service Charge in respect of the whole of that expenditure on the quarter day next following.
4.2 If funds collected by advance payments are insufficient to meet an immediate liability (and there is no reserve fund available to be applied to meet it) and the cause of the insufficiency is not vacancy of any Lettable Areas the Landlord may advance moneys (or borrow moneys for the purpose from reputable banks) at commercially competitive rates of interest and interest payable on the advance or the borrowing will form part of the Landlord’s Costs.
4.3 If the Landlord carries out major works of repair maintenance and decoration or replaces major items of plant or machinery it may:
EXCEPTIONAL EXPENDITURE. 4.1 If funds collected by way of advance payments towards Landlord’s Costs prove insufficient to meet an immediate liability (and there is no reserve fund available or which may be applied to meet the liability) and the cause of the insufficiency is not that any Lettable Areas are or have been vacant or that a tenant or occupier has defaulted in payment of his proportion of the Landlord’s Costs, the Landlord shall be entitled to advance moneys (or borrow moneys for the purpose from reputable banks) at commercially competitive rates of interest and interest payable on the advance or the borrowing shall be recoverable as an item of the Landlord’s Costs.
4.2 Where the Landlord carries out major works of repair, maintenance and decoration or replaces major items of plant or machinery it may:
(a) at its discretion apportion the Landlord’s Costs in respect of the relevant expenditure over more than one service charge period; and
(b) include in the Landlord’s Costs Base Rate Interest on the part of the expenditure to be recovered in later service charge periods.
EXCEPTIONAL EXPENDITURE. If funds collected by way of advance payments towards Landlord’s Costs prove insufficient to meet an immediate liability (and there is no reserve fund available or which may be applied to meet the liability) and the cause of the insufficiency is not that any Lettable Areas are or have been vacant or that a tenant or occupier has defaulted in payment of his proportion of the Landlord’s Costs, the Landlord shall be entitled to advance moneys (or borrow moneys for the purpose from reputable banks) at commercially competitive rates of interest and interest payable on the advance or the borrowing shall be recoverable as an item of the Landlord’s Costs.
EXCEPTIONAL EXPENDITURE. 4.1 If the Landlord is required to incur or actually incurs heavy or exceptional expenditure which forms part of the Landlord’s Costs, the Landlord will be entitled to recover from the Tenant the Service Charge in respect of the whole of that expenditure on the quarter day next following.
4.2 If funds collected by advance payments are insufficient to meet an immediate liability (and there is no reserve fund available to be applied to meet it) and the cause of the insufficiency is not vacancy of any Lettable Areas or that any occupier has defaulted in payment of his proportion of the Landlord’s Costs, or is not obliged to pay (whether as a result of a service charge cap, formal concession or otherwise) the Landlord may advance moneys (or borrow moneys for the purpose from reputable banks) at commercially competitive rates of interest and interest payable on the advance or the borrowing will form part of the Landlord’s Costs.
4.3 If the Landlord carries out major works of repair, maintenance and decoration or replaces major items of plant or machinery it may:
(a) apportion the relevant expenditure over more than one service charge period; and
(b) include in the Landlord’s Costs interest at a commercially competitive rate on the part of the expenditure to be recovered in later service charge periods.