Gross Operating Expense Recovery Models - BOMA Buzz

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Recovering your operating expenses.

With gross operating expense recovery models for gross leases, the operating expense component will be either base year or base stop.

BOMA International defines base year as a base amount of operating expenses used as a foundation for calculating a long-term lease. This is typically the calendar year in which the lease is signed.

Base stop is a fixed dollar amount of operating expenses related to the tenant’s leased premises that the landlord pays. The tenant is obligated to pay expenses exceeding that amount.

Regardless of method, the tenant will be responsible for paying the operating expenses over the base year or base stop amount.

With base stop, the tenant typically starts paying the excess amount within the first year of the lease.

For base year, the tenant begins paying the increase over the base year starting during the next calendar year.