Basic cost-pass-through information: Make sure you know whether the starting point for your lease is an expense stop or an operating expense cost-pass-through, and what calculation method is the norm for your market. Depending on your area’s market, the base year for your cost-pass-through could either be the first year of your lease or the current year, and either the calendar year or fiscal year. Your lease might include an expense stop that stipulates that you pay for any costs above a certain point—if this is the case do a little research to make sure that your expense stop is current so you do not get stuck paying any unexpected additional fees.
Cost-pass-through protection: Operating costs for a partially occupied building are significantly less than for a full building, so you will want to factor this into your lease writing if you are moving into a new or partially occupied building. Add a little protection to the cost-pass-through provision in your lease by requiring your landlord to base the calculation of your annual cost-pass-through on a 90% or 95% occupied building. A provision like this will protect your business in the event that you move into a building that takes a while to lease up.