Escalation Clause

A clause in a lease providing for increased rent at a future time. May be accomplished by several means such as (1) fixed increase - A provision that calls for a definite, periodic rental increase; (ii) Cost of living - A clause that ties the rent to a government cost of living index, with periodic adjustments as the index changes; or (iii) Direct expense - Rental adjustments based on changes in expenses paid by the landlord, such as tax increases, increased maintenance costs, etc.