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Glossary of Real Estate Terms
This Glossary has
been provided as a courtesy to assist you in
gathering information relative to real estate.
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Open Space:
An unimproved area of land or water, or
containing only such improvements as are
appropriate to the use and enjoyment of the open
area, and dedicated for public or private use or
enjoyment or for the use and enjoyment of owners
and occupants of land adjoining or neighboring
such open spaces. |
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Operating Cost Escalation: Although there
are many variations of escalation clauses, all
are intended to adjust rents by reference to
external standards such as published indexes,
negotiated wage levels, or expenses related to
the ownership and operation of buildings. During
the past thirty years, Landlords have developed
the custom of separating the base rent for the
occupancy of the leased premises from escalation
rent. This technique enables the landlord to
better ensure that the “net” rent to be received
under the lease will not be reduced by the
normal costs of operating and maintaining the
property. The landlord’s definition of Operating
Expenses is likely to be broad, covering most
costs of operation of the building. Most
landlords pass through proper and customary
charges, but in the hands of an overly
aggressive landlord, these clauses can operate
to impose obligations which the tenant would not
willingly or knowingly accept. |
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Operating Expenses: The actual costs
associated with operating a property including
maintenance, repairs, management, utilities,
taxes and insurance. A landlord’s definition of
operating expenses is likely to be quite broad,
covering most aspects of operating the building. |
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Operating Expense Escalation: Although
there are many variations of operating expense
escalation clauses, all are intended to adjust
rents by reference to external standards such as
published indexes, negotiated wage levels, or
expenses related to the ownership and operation
of buildings. |
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