Operating Expense Pass-Through
The mechanism by which a landlord recovers operating expenses from a tenant under a triple-net or modified-gross lease. The lease specifies which expense categories pass through to the tenant; the landlord bills the tenant on a periodic basis (often monthly) for the tenants proportionate share of those expenses. Pass-through structures protect the landlord from opex inflation but require detailed accounting and tenant audit rights to function smoothly. Disputes over pass-through calculations are a common source of landlord-tenant friction.
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