Office Space Gross Modified Lease Agreement (MOLA)

A Office Space Gross Modified Lease Agreement (MOLA) is an office lease agreement that is a modified gross commercial lease agreement (where the landlord and tenant share property operational expenses).

• Context:
  • It can (typically) include terms where the landlord and tenant share certain property operating expenses.
  • It can (often) have a payment structure where the tenant pays a fixed rent, including some utilities, maintenance, and insurance, while other costs are negotiated separately.
  • It can (typically) include MOLA Articles, such as:
    • MOLA Maintenance Article: Outlines the responsibilities of both the landlord and tenant regarding the maintenance and repair of the leased premises, specifically detailing how operational expenses are divided and the scope of maintenance duties for each party.
    • MOLA Payments Article: Specifies the financial obligations of the tenant, including rent, deposits, fees, and the shared property operational expenses. This article delineates the methodology for calculating and paying these expenses, ensuring transparency and agreement on financial responsibilities.
    • MOLA Utilities and Services Article: Defines which utilities and services are included in the lease, the division of costs between the landlord and tenant for these services, and any specific responsibilities each party has for managing and paying for utilities.
    • MOLA Improvements and Alterations Article: Details the terms under which the tenant can make alterations or improvements to the premises, including how costs for such improvements are shared, approved, and managed, ensuring both parties agree on the extent and funding of property modifications.
    • MOLA Insurance Article: Describes the insurance requirements for both the landlord and tenant, including which types of insurance each party must carry and how shared expenses like premiums or deductibles might be allocated between them, ensuring comprehensive coverage for all aspects of the property and lease activities.
    • ...
  • It can be for Urban Commercial Areas where office leasing is competitive and requires flexibility in office lease terms.
  • It can associated with a Gross Modified OLA Playbook, with gross modified OLA review rules.
  • It can be associated with a Gross Modified OLA Template.
  • ...
• Example(s):
  • An agreement in a downtown office tower where the landlord covers building maintenance and utility costs, while the tenant pays a fixed monthly rent that includes these services.
  • A lease in a corporate park where the landlord and tenant agree on sharing certain costs like security services and common area upkeep.
  • Two Commerce Square Modified Gross Office Lease Agreement - 2018 [1].
  • PENINSULA OFFICE PARK: OFFICE LEASE AGREEMENT [2].
  • ...
• Counter-Example(s):
  • A Gross Office Lease Agreement, which places all of the operating expenses on the commercial real-estate landlord.
  • A Retail Lease Agreement, tailored for retail businesses and not office spaces.
  • A Triple Net Lease Agreement for office spaces, where the tenant bears all expenses, including property taxes, insurance, and maintenance.
• See: Office Space Leasing, Commercial Lease Negotiations, Lease Payment Structures, Multi-Tenant Building Management, Urban Office Leases, Tenant and Landlord Shared Costs.

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References

2024

• https://www.signnow.com/fill-and-sign-pdf-form/245471-air-standard-multi-tenant-office-lease-gross
  • QUOTE: Gross lease is where the landlord pays for operating expenses, while a net lease means the tenant takes on the property expenses. A modified gross lease means that the operative expenses are borne by the tenant and the landlord.
  • QUOTE: The Modified Gross Lease is a way for a Tenant and Landlord to find some middle ground on property expenses. The Gross Lease puts all of the property expense risks on the building owner. The Triple Net Lease (NNN) puts all of the property expense risks on the Tenant.

2023

• Web Chatbot
  • QUOTE: A Gross Modified Office Lease Agreement often involves a shared responsibility between the landlord and tenant for certain operating expenses, providing a blend between a gross lease and a net lease. This type of agreement is frequent in multi-tenant office buildings and allows for flexible negotiations regarding expense responsibilities.

2018

• Two Commerce Square Modified Gross Office Lease Agreement - 2018.
• NOTE:
  • Fixed Rent and Additional Rent:
    • "Fixed Rent" is defined with specific amounts for different periods.
    • "Additional Rent means all costs and expenses other than Fixed Rent..."
  • Operating Expenses:
    • "Operating Expenses means collectively Project Expenses and Taxes."
    • "Project Expenses means all costs and expenses paid... in connection with the maintenance, operation, repair, and replacement of the Project..."
  • Utilities:
    • "Tenant shall pay for utility services... Tenant shall pay directly to the applicable utility service provider..."
  • In a standard Gross Office Lease Agreement (OLA), these elements would differ as follows:
    1. The rent would typically be a single, inclusive amount covering all costs without a separate categorization of additional rent.
    2. Operating Expenses are generally fully covered by the landlord, not shared with the tenant.
    3. Utilities are usually included in the rent, with the landlord responsible for these payments.

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