Also known as: expense stops · stop
Written by attorneys · grounded in primary & secondary sources — see below
A lease provision that caps the landlord's obligation to pay building expenses. Once expenses exceed the stated cap, the tenant must pay the excess.
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Elemental Pharmaceuticals leases office space from Everest Holdings under a lease containing an expense stop of $12 per square foot. When actual operating expenses reach $15 per square foot, Elemental must reimburse Everest for the $3 excess on each square foot.
Elysium Media signs a retail lease with an expense stop set at the 2023 base-year level. After common-area maintenance costs rise sharply in 2024, Elysium pays the landlord the difference above the stop amount each quarter.
Emerald Enterprises leases a warehouse with an expense stop of $8 per square foot. When insurance premiums and utility costs push total expenses to $11 per square foot, Emerald pays the landlord the $3 overrun for the remainder of the lease year.
Eric Espinoza leases ground-floor space in a mixed-use building. The lease caps landlord expenses at the 2022 base amount. When real-estate taxes increase the following year, Eric pays the landlord the amount exceeding the expense stop.
Eva Espinosa leases an industrial unit subject to an expense stop of $10 per square foot. After snow-removal and landscaping costs exceed the cap, Eva reimburses the landlord for every dollar above the stop for the balance of the term.
Enzo Eastwood leases medical office space with an expense stop tied to the prior year's actual costs. When janitorial and security expenses rise, Enzo pays the landlord the amount by which current expenses exceed the stop figure.
An expense stop caps the landlord's responsibility for operating expenses at a fixed dollar amount per square foot. Any expenses above that amount become the tenant's obligation.
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The amount is usually set at the landlord's actual expenses for a base year or at a negotiated fixed figure stated in the lease.
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The tenant pays the landlord the full amount of expenses that exceed the stop.
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