Operating Expense Limitations Clause Samples
The Operating Expense Limitations clause sets a cap on the amount of operating expenses that can be charged or passed through, typically in a lease or management agreement. In practice, this clause may specify a maximum percentage increase in expenses from year to year or exclude certain categories of costs from being counted toward the limit. Its core function is to protect tenants or clients from unexpected or excessive increases in operating costs, ensuring predictability and financial stability.
Operating Expense Limitations. For each Fund and/or Class designated as having an operating expense limitation in Schedule 1, the Manager agrees to pay any of the Fund’s and/or Class’ (as applicable) operating expenses excluding management fees; interest; expenses related to borrowings, taxes, and brokerage; nonrecurring, extraordinary expenses; and acquired fund fees and expenses (collectively, “Class Operating Expenses”), or reimburse the Fund and/or Class (as applicable) for Class Operating Expenses to the extent Class Operating Expenses exceed the limitation as set forth on Schedule 1, on an annualized basis, of the Fund’s and/or Class’ (as applicable) average daily net assets (hereinafter referred to as the “Operating Expense Limitation”). Any Class Operating Expenses paid by the Manager pursuant to the Operating Expense Limitation are subject to reimbursement to the Manager by the Fund and/or Class (as applicable) whenever the Class Operating Expenses are below the Operating Expense Limitation for the Fund or Class (as applicable) set forth on Schedule 1. However, no reimbursement will be made more than three years after the payment of Class Operating Expenses by the Manager or if such reimbursement would result in the Class Operating Expenses exceeding the limitation as set forth on Schedule 1.
Operating Expense Limitations. (1) The building, of which the Premises are a part, will be managed by a management company selected by Landlord and Operating Expense services will be performed by third parties selected by Landlord. Landlord estimates that for the Base Year (November 2000 - October 31, 2001), Operating Expenses will be in a range of $3.50 to $5.50 per square foot (exclusive of real estate taxes, utilities or insurance).
(2) If, in Tenant's reasonable business judgment, Operating Expenses increase excessively during a Lease Year, Tenant will notify Landlord, describing in detail the increase or increases, and Landlord will work with the Tenant to resolve Tenant's concern which will include, but not be limited to, securing two competitive bids for the service or services which are in question.
(3) During any Lease Year if, in Tenant's reasonable judgment, Landlord fails to provide the services which it is required to provide under the terms of the Lease, Tenant shall notify Landlord in writing, describing in detail the problem with the service or services and Landlord shall have thirty (30) days thereafter in which to remedy the problem.