Operating Expense Recovery
Expense recovery varies by lease type: gross (none), modified gross (above base year), net (taxes, insurance, CAM), triple net (all), absolute net (including structural). Calculate: total recoverable x pro rata share minus base year. Landlord must maintain records, provide reconciliation within 90-120 days, and segregate capital.
By Lease Type
- Gross: no recovery (included in rent)
- Modified gross: increases above base year
- Net/NNN: taxes, insurance, CAM
- Absolute net: all including structural
Calculation
- Total recoverable x pro rata share
- Minus base year amount
- Bill net recoverable amount
Landlord Obligations
- Detailed records (invoices, contracts)
- Reconciliation within 90-120 days
- Consistent accounting, audit access
Related Terms
- Net Lease — Expense structure
Barnes Walker Commercial Real Estate
Barnes Walker’s attorneys structure expense recovery provisions in Florida leases. Request a legal inquiry for assistance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC