Tenant's Proportionate Share | Practical Law

Tenant's Proportionate Share | Practical Law

Tenant's Proportionate Share

Tenant's Proportionate Share

Practical Law Glossary Item 2-503-3631 (Approx. 3 pages)

Glossary

Tenant's Proportionate Share

Also known as tenant's pro rata share. The portion of a building occupied by the tenant expressed as a percentage. When a tenant is responsible for paying its proportionate share of the landlord's costs for the building, such as operating expenses and real estate taxes, the tenant pays this amount over a base year. In general, the tenant's proportionate share is determined by taking the building's rentable square footage and dividing it by the tenant's rentable square footage. Local industry customs usually provide the landlord with the guiding principles for:
  • Measuring the building.
  • Measuring the premises.
  • Calculating the tenant's proportionate share.