Question

Which of the following provisions that might be found in a Class A office space lease seems to have been negotiated by the tenant (thus in the tenant's favor)?

	a.	Rent escalation clause
	b.	Very low expense stop
	c.	Six months free rent
	d.	Extensive listing of recoverable expenses

Answer 1

The provision of Six months free rent and very low expense stop are the provision that are negotiated by the tenants and only favours the tenant. Six months free rent favours the tenants as they are allowed to use the property for six months without creating any liability for rent. Expense stop is the fixed amount that the tenants pay only when the operating expenses and the taxes of the property cross above a said amount. Thus, a low expense stop means tenants have to pay very low amount for the operating expenses and the tax related to the property.

Rent escalation clause favours the landlord as it allows them to increase the base rent of the lease agreement when it is renewed at the end of every term
Extensive listing of recoverable expenses are expenses that are incurred to run the property and are billed back to tenant in the form of the rent such as electricity.