A lease will generally contain an inclusive definition of outgoings. That is, it will specify all amounts paid or payable by the landlord for an outgoings year. For example, this may include rates and other charges, taxes, insurance, caretaking, repairs etc.

See Outgoings – What they include.

There are different ways of dealing with outgoings in a lease depending on whether or not the tenant contributes to the outgoings.

For example, in a net lease a tenant contributes to the outgoings of the building in which the premises is located in addition to paying rent. The proportion of outgoings payable by a tenant is usually the proportion that the net lettable area of the premises bears to the total lettable area of the property.

However, in a gross lease a tenant pays rent, but either does not contribute towards the outgoings of the premises or only contributes towards the amount by which the cost of the outgoings increases from the cost of the outgoings in a given year.

Another way of dealing with outgoings is through a gross or semi-gross lease whereby the tenant pays the amount by which the outgoings increase over the cost of those outgoings in a base year.

See Dealing with outgoings in a lease.

There are two common ways in which outgoings will be charged during the term:

See How outgoings are charged.