In a net lease with Base Years Stop, who pays for the costs over the base year amount?

In a net lease structured with a Base Year Stop, the tenant agrees to pay for operating expenses related to the property, but only up to a specified threshold known as the base year amount. Any costs that exceed the base year expenses are the responsibility of the tenant for subsequent years. This means that if operating costs rise past the established amount from the base year, the tenant will cover those additional costs starting from the following year onward.

This structure allows property owners to have a predictable income from fixed expenses while shifting the risk of rising operating costs to the tenant. Understanding this arrangement is vital for both landlords and tenants, as it influences how lease agreements are negotiated and managed over time.