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WiseOwl58, Lawyer
Category: Real Estate Law
Satisfied Customers: 3731
Experience:  Experienced real estate lawyer and real estate broker.
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Mr. Socrateaser: Please do NOT respond to this

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@@@@@@@@@Mr. Socrateaser: Please do NOT respond to this [email protected]@@@@@@@ This relates to Real Estate lease amendment regarding how to cap landlord's partial Operating Expenses. We are located in Missouri, USA. I have the following 2 major questions. ###Question
1### – 2 clauses (1) How to interpret term in the draft: ” ****(a) the items of Controllable Operating Expenses may not increase by more than five percent (5%) per calendar year, on a cumulative and compounding basis.****” (b) “******(i.e., so long as the
average increase in the Operating Expense pass-through for a particular Controllable Operating Expense for all expired calendar years that the Cap Percentage applies does not exceed the Cap Percentage, then the percentage increase in such Controllable Operating
Expense for the next calendar year may exceed the Cap Percentage).******”) I have worksheet attached with my possible interpretation and landlord's interpretation under tab “interpretation”. Please add your interpretation into the worksheet, if there is more.
(2) How would you interpret above (a) without (b), please use the worksheet to present; (3) How would you interpret:above (b) without the word “a particular”? (4) Is (b) not complete? Does it talk about one specific expenses such as payroll or it meant to
say one particular year? (5) Should I add Basic Cost at $806,352 (as mentioned in the draft). Somehow, this draft implies to replace Basic Cost with the listed Controllable Operating Expense as $1,178,858. (under attached worksheet “How CAM is calculated”
it explains the relationship between Controllable Operating Expense, Basic Cost and Tenant's share to pay. (6) Given whatever your interpretation is for (a) & (b), please offer your comment and advise (I do not intent to change the draft terms, just to make
sure that there is no hidden risk here); ###Question 2 ### ***** definition of “non-Controllable Operating Expense is RELATED TO taxes or insurance”. (a) does this mean landlord can only charge either taxes OR insurance, but not both? (b) when the clause uses
“RELATED TO TAX”, does this give landlord opportunity to include tax related fees such as hiring consultant to reduce property tax? My thought is “tax” would be all bills coming from government agencies directly. Not include fees of hiring consultant to reduce
tax. What would you interpret this? I have attached the lease draft from landlord (you only need to read starting from the gray highlighted area; bright green is my question; rose color is the clause in question; dark green relates to Question 2.
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  WiseOwl58 replied 2 years ago.
You can put all reasonable expenses into operating expenses under applicable Missouri law and under GAAP generally accepted accounting principles. You are in a very grey area with the landlord, and the legal case precedent in Missouri says that he must accept all reasonable expenses that you are willing to accept.
I hope this helps. Good luck to you. I wish you all the best.
Customer: replied 2 years ago.
Would you please opt out. I'd like to work with another expert.
Expert:  WiseOwl58 replied 2 years ago.
How can i help you?
Customer: replied 2 years ago.
You really can't help me. Please opt out this time. Thank you.