Operating Cost Exclusions Clause Samples
The Operating Cost Exclusions clause defines which expenses are not to be included in the calculation of operating costs, typically in a commercial lease context. This clause specifies certain costs—such as capital improvements, landlord’s debt service, or costs attributable to other tenants—that the tenant will not be responsible for reimbursing through their share of operating expenses. By clearly outlining these exclusions, the clause protects tenants from being charged for inappropriate or extraordinary costs, ensuring fairness and transparency in the allocation of building operating expenses.
Operating Cost Exclusions. Operating Costs shall not include: (i) costs (including tenant improvements, permit, license and inspection costs) incurred in renovating or otherwise improving, altering or building out rentable space for other tenants or vacant rentable space; (ii) costs of utilities or services sold to Tenant or others for which Landlord receives reimbursement; (iii) costs of interest on debt or amortization on any mortgages, rent and other charges, costs and expenses payable under any mortgage or ground or underlying lease, if any; (iv) costs of electrical power for which a tenant directly contracts with and pays a local public service company; (v) charitable or political contributions made by Landlord; (vi) maintenance and repair of capital items not a part of the Property, except such offsite items as may be reasonably necessary for the operation and use of the Property, which costs may then be amortized and included, yearly, as Operating Costs; (vii) any expenses for repairs or maintenance which are covered by warranties, guarantees and service contracts (excluding any mandatory deductible) to the extent collected and paid to Landlord; (viii) legal expenses arising out of the enforcement of the provisions of any leases and other occupancy agreements affecting the Property; (ix) depreciation or amortization, other than as provided in the definition of Operating Costs in Section 4(a); (x) costs incurred in connection with damage or repairs which are covered under any insurance policy carried by Landlord or responsible third party; and (xi) any other expenses which, under generally accepted accounting principles consistently applied, would not be considered a maintenance, repair or operating expense, or would not normally be treated as a cost of operation (to be reimbursed by tenants) by landlords of comparable buildings. (xii) Late fees or penalties incurred by Landlord or Landlord’s agent.
Operating Cost Exclusions. “Operating Costs” shall not include and in no event shall Tenant be required to pay for (i) any property management fee retained by Landlord or its affiliates or paid to third parties for property management fees with respect to the Project in excess of three percent (3%) of Base Rent; (ii) expense reserves; (iii) costs which could be properly capitalized under generally accepted accounting principles, except to the extent amortized over the useful life of the capital item in question; (iv) costs incurred in connection with the presence of any Hazardous Materials in the Premises, the Building or the Project, except to the extent (x) caused by Tenant or any subtenants or other occupants of the Premises and their respective agents, contractors, subcontractors, employees, invitees or licensees (collectively, “Tenant Parties”) or (y) exacerbated by any negligence or willful misconduct of Tenant or any other Tenant Parties; (v) costs to comply with Applicable Requirements applicable to the Building or the Project on the Second Additional Premises Commencement Date; (vi) insurance deductibles in excess of $100,000 per occurrence and co-insurance payments; (vii) capital improvements, repairs or replacements (including repairs to structural components of the Building), except if the same are reasonably intended to result in a reduction in Operating Costs (for example, a labor-saving improvement) or are required by Applicable Requirements first applicable to the Building or the Project after the Second Additional Premises Commencement Date.
Operating Cost Exclusions. Notwithstanding Sections 5.1 and 5.4 above, the following items shall be excluded in calculating the total Operating Costs of the Center:
(a) Costs of repairs, replacements or utility services for which other tenants pay, or are obligated to pay, or for which Landlord received insurance proceeds or condemnation awards;
(b) Leasing commissions, legal fees and other expenses incurred by ▇▇▇▇▇▇▇▇ in dealings with other tenants and prospective tenants, and costs to improve or make space "tenant-ready";
(c) The costs of any special services, operations or accommodations for the benefit of specified tenants (as opposed to all tenants of the Center and their customers or the public generally);
(d) The costs of governmental compliance, remediation of hazardous materials, and capital improvements relating to buildings and premises available for lease to tenants or which expand or increase the Gross Rentable Area of the Center; and
(e) The costs of governmental compliance, remediation of hazardous materials, and capital improvements relating to any other facilities, structures or improvements in the Center, including parking facilities and ornamental structures or other improvements in public or common areas or not comprising premises available for lease, except to the extent that such costs are deductible in the current year on a straight-line basis in accordance with generally accepted accounting practices.
Operating Cost Exclusions. Operating Costs shall not include the costs for:
Operating Cost Exclusions. For the avoidance of doubt, and notwithstanding anything to the contrary contained in this Lease, Operating Costs shall not include any of the following:
Operating Cost Exclusions. The following are, without limitation, --------- ---- ---------- examples of costs that, notwithstanding anything to the contrary set forth in this Lease (including Section 2 of this Exhibit C), shall be excluded from the computation of Operating Costs:
(a) leasing commissions, attorneys' fees, costs and disbursement and other expenses incurred in connection with leasing, renovating or improving space for tenants or prospective tenants of the Project;
Operating Cost Exclusions. The following are, without limitation, examples of costs excluded from the computation of Operating Costs:
(1) leasing commissions, attorney's fees, costs and disbursements and other expenses incurred in leasing, renovating or improving space for tenants or prospective tenants of the Building;
(2) costs incurred by Landlord in the discharge of its obligations under the Work Letter;
(3) costs (including permit, license and inspection fees) incurred in renovating or otherwise improving or decorating, painting or redecorating space for tenants of vacant space;
(4) Landlord's costs of any services sold to tenants for which Landlord is entitled to be reimbursed by such tenants as an additional charge or rental over and above the Base Rental and Operating Costs payable under the lease with the tenant or other occupant;
(5) any depreciation and amortization on the Building, except as expressly permitted herein;
(6) interest on debt or amortization payments on any mortgages or deeds of trust or any other debt for borrowed money;
(7) all items and services for which Tenant reimburses Landlord outside of Operating Costs or pays third person or which Landlord provides selectively to one or more tenants or occupants of the Building (other than Tenant) without reimbursement;
(8) advertising and promotional expenditures; and EXHIBIT C-2 Initial Initial
(9) repairs or other work occasioned by fire, windstorm or other work paid for through insurance or condemnation proceeds.