The 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 bares 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. It is unlikely that QLoop Expense Increase Cap calculator can be used for incorrectly worded expense increase cap clauses..

Cap Type - Term Cap: 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.

Prior (Previous) Year: The Cap chargeable to the Premises for each year depends on the amount that is applicable in the immediate preceding year. The expense amount applicable in the immediate prior year is the expense amount which was used to determine the tenant's 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 which: (1) were excluded in prior years due to the application of a Cap ("Excess") or (2) were unaffected by the cap because the actual expenses for the prior years were less than the calculated cap ("Shortfall"). If a user of this QLoop Expense Increase Cap calculator believes the intent of a "cumulative cap" clause in the lease refers to Claw-Back as described and used herein, select either "Excess", or "Shortfall", as the case may be per the lease. 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: A 4% Cap rate will be applied as follows 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: A 4% Cap rate will be applied as follows: 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. The use of illustrative exhibits significantly reduce landlord and tenant disputes and conflicts in lease negotiations and audit resolutions.