do you have a tax escalation clause in your lease?

do you have a tax escalation clause in your lease? by Anonymous on September 11, 2017 @16:44

I just got an email from Zillow that said that you can keep part of a tenant's security deposit if you have a tax escalation clause in your lease. Never heard of it. Have you? What is the wording?

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Re: do you have a tax escalation clause in your lease? by Stephen (Washington (WA)) on September 12, 2017 @14:24	[ Reply ]

A long, long time ago I was a tenant who had a tax escalation clause in his lease. It was a multi-year lease (I believe this info is significant as I don't seen any reason for such a clause in a one-year lease). The escalation was to my rent payment and had nothing to do with the security deposit. I do not recall what the wording was. An item to consider, the escalation was tied to taxes only. When the escrow change notice came (it probably should have gone to the owner or manager instead) I noted that the change in escrow for the mortgage company included insurance increase and that fudge factor that mortgage companies put in to ensure there is enough set aside for next year's taxes and to re-coup any shortages from last year's escrow. So a couple things to consider: - is your concern only taxes or any and all increases that might be in your escrow payment? This needs to be clear in the lease. - are you going to provide anything (if so, what) to the tenant to substantiate the change in rent?

Re: do you have a tax escalation clause in your lease? by dave on September 12, 2017 @14:37	[ Reply ]

escalations or pass throughs are typically more common in commercial leases that are longterm with options. I have used them as a belt and suspenders in my residental leases for taxes, insurance, HOA fees and special assessments. In NYC RE taxes often have a special additional 'ding' which comes out in November / December. Also insurance policy anniversary dates vary and HOA's often have their ''special assessments". If these are a couple of dollars (per month) I often just absorb them, If not I pass them through directly without markup. I'm open about the base's at start of tenancy and generally tenants understand and are Ok. I also don't get greedy at rental increase time. Some tax juristictions assess and bill in arrears and increases have to be explained and properly prorated as in arrears. Trying to collect from departed tenants is a ''good luck'',.....so I don't try.

Re: do you have a tax escalation clause in your lease?

do you have a tax escalation clause in your lease? - Landlord Forum thread 354204