Operating Cost Escalations Sample Clauses

The OPERATING COST ESCALATIONS clause defines how increases in the ongoing costs of operating a property or business are handled over time. Typically, this clause outlines the method for calculating and passing on increases in expenses such as utilities, maintenance, insurance, or taxes to tenants or other parties, often by referencing an index or actual cost changes. Its core function is to ensure that the party responsible for these costs is able to recover or share the burden of rising expenses, thereby protecting against the risk of eroding profitability due to inflation or unforeseen cost increases.