Glossary

  • Assessment

    Evaluation of property by a taxing authority for the purpose of levying a property tax.

  • Audit rights

    The right to examine the financial records of a landlord to uncover errors and other irregularities. The rights are limited to a specific amount of time, as detailed in the tenant's lease.

  • Base year audit

    An audit of the base year Operating Expenses of a lease.

  • Base rent

    Specified rental in a lease before adjustment or additional rent charges. Base rent can be adjusted on a periodic basis. Often a tenant will have an obligation to pay various costs of utilities and/or property maintenance which may be designated as "additional rent," payable over and above "base rent." The term "base rent" is often a defined term in a particular lease, in which case the definition as specified will control the meaning of the term.

  • Base year

    A specific year of a lease against which certain rent escalations and additional expense reimbursements to landlord may be calculated.

  • Consumer Price Index (CPI)

    An average of the prices of goods and services commonly bought by families in urban areas. This indexes the most well-known inflation gauge and is often referred to as the cost-of-living index, which labor contracts, rents, and social security are tied to. The CPI is important to landlords because it helps keep the base monthly rent in pace with inflation. The monthly rent will increase in a percentage equal to the increase of the CPI figure.

  • Direct electricity

    The simplest and generally least expensive method for the tenant to obtain electricity. The tenant contracts directly with the provider and pays them for electric service.

  • ERIF

    Electricity Rent Inclusion Factor. (See Rent inclusion electricity).

  • HVAC

    Heating, Ventilating and Air Conditioning. Costs associated with business-hour HVAC are often included in the services provided by the landlord under most leases. Overtime Heating, Ventilation and Air Conditioning (OTHVAC) will result in additional charges.

  • Porter's wage escalation

    This escalation method is based on the porters' wage rate in the year in which you enter into the lease. This billing method originated from the assumption that the increase in the cost of running a building approximates the increases in wages. Therefore, the wage for a porter pursuant to the applicable union contract is used as a base. The porter's wage is determined every three years by agreement between the Realty Board on Labor Relations and the union 32B/32J. Similar to an operating expense escalation, the porters' wage concept is based on increases over a base year.

  • Rebate

    Amount paid back or credit given because of an over-collection or the return of property sold. Also called refund.

  • Rent inclusion electricity

    Electricity charged on a rent inclusion basis is a fixed amount, which is typically quoted on a per square foot basis. The electricity lease clause will typically provide the landlord the right to conduct a periodic survey to determine if usage has increased over certain initial usage levels and may have the option to increase the charge. Additionally, the landlord typically reserves the right to increase the charge if the third party electrical provider increases its rates.

  • Submeter electricity

    In this case, a meter is installed that measures electricity provided to your premises. However, the landlord is the one that contracts with the third party electrical provider, not the tenant. The landlord then bills the tenant the "actual cost," which is calculated at a negotiated rate, plus an administrative charge. The calculation of cost can be complicated even when defined within the lease clause.

  • Survey

    A measurement of land or building for the purpose of determining the boundaries of its perimeter, its contours, and area. A survey may also refer to an engineering analysis used to evaluate electrical consumption.