This QLoop Expense Increase Cap calculator is provided only as a guide and represents various Expense Increase Cap formulas which have been encountered by the author. All calculations should be manually and independently verified by the user prior to use. QLoop, LLC bears no responsibility for misuse, inapplicability to actual lease agreements, misapplication, misinterpretation or other incorrect uses. The intent of the lease should determine the requirements selected. Please note that specific lease terms may be interpreted differently, or intended by the parties to be applied differently than as used here.
Cap Type - Term: The Cap (maximum Expense) chargeable to the Premises for each year is determinable upon obtaining the base year, or initial year's cost. The calculated Cap is not changed as a result of the actual expenses incurred in a previous year.
Cap Type - Prior (Previous) Year: The Cap chargeable to the Premises for each year depends on the amount that is applicable in the immediately preceding/prior year. The expense amount applicable in the immediately prior year is the expense amount of which the tenant paid a share.
"Claw-Back" is used here only as a descriptive term for when a lease permits the landlord to recover (i.e., "claw-back") the expenses that were excluded in prior years due to the application of a Cap. If the user believes the intent of a "Cumulative Cap" clause in the lease refers to Claw-Back as described and used herein, select "Yes". Otherwise, select "No".
Compounding: If the lease provides for a compounding Cap, select "Yes" and the Cap Rate selected will be applied in a compounding manner (example: 1.04% x 1.04% x 1.04%, etc.).
Cumulative: If the lease provides for a cumulative Cap, select "Yes" and the Cap Rate selected will be applied in a cumulative manner (example: 1.04%, 1.08%, 1.12%, etc.). If the parties to the lease have agreed to a different interpretation of "cumulative", please apply the parties interpretation as intended.
QLoop Exhibit: A hypothetical version which illustrates the intent of the parties may be printed and inserted in the lease as an exhibit. Use of illustrative exhibits significantly reduce conflict and disputes in lease negotiations and audit resolutions.