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Expense Cap
A commercial lease clause that limits the annual percentage increase of controllable operating expenses passed through to the tenant.
An Expense Cap is a contractual limit agreed upon in a commercial lease restricting the maximum percentage or dollar amount by which controllable operating expenses (such as management fees or janitorial contracts) can increase year-over-year in tenant CAM reconciliations.
More in Accounting & Finance
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Charges billed to a commercial or residential tenant beyond base rent, including CAM reconciliations, property taxes, insurance, and late fees.
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The accounting methodology categorizing past-due receivables into 30/60/90-day aging buckets and provisioning an allowance for uncollectable rent.
Read definition →Base Year & Gross Up Provision
A commercial lease provision adjusting variable operating expenses to reflect 95-100% occupancy to ensure equitable pass-through billings.
Read definition →CAM Audit Rights & Tenant Expense Objections
Contractual clauses permitting commercial tenants to inspect landlord invoices and ledger records supporting annual CAM true-up charges.
Read definition →CAM Reconciliation
The annual calculation reconciling actual shared building operating expenses against estimated monthly payments billed to commercial tenants.
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