The mechanism by which a commercial landlord shifts building operating costs to tenants. Each tenant pays a pro-rata share of these expenses based on the size of their leased space relative to the total building.
In a pass-through structure, the landlord estimates annual operating costs at the start of the year and bills tenants in monthly installments alongside base rent. At year-end, the landlord performs a reconciliation: if estimated payments fell short of actual costs, the tenant pays the shortfall; if they overpaid, they receive a credit. Tenants often negotiate "expense stops" or exclusions for items like capital improvements, executive salaries, or the landlord's legal fees to limit their exposure.
Lextract extracts these fields directly from your lease PDF:
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