Clause LibraryRent Escalation
Rent Escalation Clause
Rent
warning risk
both lease
Defines how and when base rent increases over the term or on renewal.
Tenant-friendly language
“Rent shall increase annually by the lesser of 3% or the change in CPI for the prior 12 months.”
Landlord-friendly language
“Rent shall increase by 5% annually, or by CPI plus 2%, whichever is greater, on each anniversary.”
What to watch out for
Uncapped or 'sole discretion' increases, percentages above 5%, and compounding language.
How to negotiate
Push for a hard cap or CPI linkage. Ask for the first year to be fixed with a known cap thereafter.
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