Property Management
What is 'expense stop' in commercial leasing and how does it affect tenant costs in Illinois?
AA clause stopping expenses from increasing during the lease term
BA lease provision where the landlord pays all expenses up to a set amount (the stop), and the tenant pays any expenses above the stop✓ Correct
CA requirement that tenants stop certain activities that create excessive expenses
DA cap on the tenant's total expenses under any net lease
Explanation
An expense stop is a provision in a modified gross or gross lease where the landlord absorbs operating expenses up to a specified amount (the stop), and the tenant pays any expenses exceeding the stop. This protects the landlord against rising operating costs while providing the tenant with some cost certainty up to the stop level. The stop is often set at the actual expenses in the first year of the lease.
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