What type of costs can a landlord typically pass through to tenants?

When considering the types of costs a landlord can pass through to tenants, it's important to focus on the nature of these expenses and the common practices in commercial property management. Increased property taxes and operating expenses are often categorized as pass-through costs because they are essential for maintaining the property's functionality and value.

Landlords typically include provisions in leases that allow them to pass on these costs to tenants. This means that if property taxes increase or if there are higher operating costs—such as maintenance, insurance, or utilities—landlords can adjust the rental amounts to reflect these changes. This practice helps ensure that landlords can maintain the property and continue offering necessary services, while also holding tenants accountable for contributing to the overall operating costs of the property.

In contrast, utility costs associated with common areas, advertising costs for the property, and interior renovations for tenant spaces may not typically fall under pass-through costs, as they often vary in terms of how they're charged or covered under different lease agreements. For instance, advertising costs may be viewed as a marketing expense absorbed by the landlord to attract tenants, rather than a direct charge passed onto tenants. Similarly, interior renovations tend to be specific to tenant lease agreements and are generally the tenant’s responsibility unless otherwise negotiated.