Item Cap and Admin Fee Cap

Purpose

Item Cap and Admin Fee Cap help honor lease terms that limit recoverable charges.

Use Item Cap when a recovery item has a maximum amount that can be recovered from the tenant for that Item ID. The cap is applied after the recovery calculation determines the tenant's share for the item, so the final recoverable item amount does not exceed the configured limit.

Use Admin Fee Cap when the administration fee has its own maximum amount. This cap is independent from the Item Cap, so users can limit the administration fee even when the underlying recovery item has a different cap or no Item Cap at all.

Together, these controls make the reconciliation preview, journals, and exports clearer by showing when a cap affects the calculated recovery or administration fee.

Where Caps Are Configured

Caps are configured in the recovery setup used by the lease recurring charge. Depending on the workflow, users can enter the values directly in the recurring charge's Recovery Settings or maintain them in a Recovery Template and apply the template to recurring charges.

Recovery Settings

1. Go to Leases.

2. Open the lease that contains the recovery charge.

3. Open the Recurring Charges tab.

4. Locate the recurring charge / Item ID that will be reconciled.

5. Open Recovery Settings for that recurring charge.

6. Complete the normal recovery configuration, including recovery period, reconciliation controls, expense categories, GL accounts, pro-rata settings, and admin fee settings when applicable.

7. Enter the applicable cap values:

   • Item Cap: the maximum recovery amount allowed for the recurring charge Item ID.

   • Admin Fee Cap: the maximum administration fee amount allowed for the recurring charge.

8. Save the recovery settings.

Recovery Templates

1. Go to Setup > Recovery Template.

2. Add or edit the recovery template.

3. Complete the template's normal recovery configuration.

4. Enter the applicable Item Cap and/or Admin Fee Cap.

5. Save the template.

6. Apply the template to the relevant recurring charges.

When a cap is maintained in a template, confirm that the intended values are present on the recurring charge after applying the template, especially if the charge was previously configured manually.

Required Setup Details

Before running reconciliation, confirm the following:

• The recurring charge has a valid Item ID.

• Recovery Settings are complete for the selected reconciliation method.

• The recovery period has Recovery From and Recovery To dates.

• Expense categories are configured and mapped to the correct GL accounts.

• Actual expenses have been pulled or entered for the recovery period.

• Pro-rata share settings are complete, including manual percent or square-footage setup.

• If the charge should include an administration fee, Charge Administration Fee is enabled.

• If charging an administration fee, the Admin Fee Calculation Method, Adjustment Item ID, and Admin Fee Percent are completed.

• Expense categories that should be included in the administration fee basis are marked Subject to Admin Fee.

• Item Cap and Admin Fee Cap values match the lease terms before previewing or posting.

How Reconciliation Calculates the Amounts

The reconciliation process first calculates recoverable expense amounts from the recovery setup:

1. The system starts with the actual expense for each expense category.

2. If an expense-category cap exists, the system compares the actual expense to that cap and uses the lower amount as the Effective Amount.

3. The system applies occupancy, pro-rata share, and multiplier rules to calculate the tenant share.

4. The system totals the tenant share for the recurring charge / Item ID.

5. If an Item Cap is configured, the system limits the final recoverable item amount to the cap.

6. If reconciliation charges are enabled, the system subtracts previously billed amounts from the capped or uncapped total to calculate the reconciliation charge.

7. If administration fees are enabled, the system calculates the admin fee using only expense categories marked Subject to Admin Fee.

8. If an Admin Fee Cap is configured, the system limits the administration fee charge to the cap.

The Item Cap and Admin Fee Cap are separate controls. Applying one does not automatically apply the other.

Impact in the Reconciliation Preview

The reconciliation preview is the user's main place to review whether the calculated charges match the lease setup before creating entries.

Expense Detail Section

For each recurring charge / Item ID, the preview displays expense category details such as:

• Expense Category

• Total Expense

• Cap

• Effective Amount

• Occupancy

• Unit Sq. Ft. and Property Sq. Ft., when applicable

• Pro-Rata Share

• Tenant Share

• Apply Multiplier, when applicable

The existing Cap and Effective Amount columns show category-level caps. If the Total Expense is higher than the category cap, the Effective Amount uses the capped value. If no category cap exists, the Effective Amount equals the Total Expense.

Item Cap Information

When an Item Cap is configured, the preview should make the Item Cap visible at the recurring charge / Item ID level. Users should review:

• The calculated tenant share before the Item Cap.

• The configured Item Cap amount.

• Whether the Item Cap was applied.

• The final recovery amount after the Item Cap.

• The reconciliation charge after subtracting previously billed amounts.

If the calculated recovery amount is less than or equal to the Item Cap, the cap does not reduce the charge. If the calculated recovery amount is greater than the Item Cap, the final recovery amount is limited to the Item Cap.

Example:

Administration Fee Information

When administration fees are enabled, the preview displays an Administration Fee Information section. Users should review:

• Total Tenant Share used as the admin fee basis.

• Apply Admin Fee Percent.

• The calculated administration fee.

• The configured Admin Fee Cap, when present.

• The final Administration Fee Charge after the cap.

The administration fee basis includes only expense categories marked Subject to Admin Fee. Expense categories not marked Subject to Admin Fee are excluded from the admin fee calculation.

Example:

Impact in PDF Export

The reconciliation PDF export should match the preview so users can validate and retain the same information outside the application.

When caps are configured, the export should show:

• Item Cap information for the recurring charge / Item ID.

• Whether the Item Cap affected the final recovery amount.

• Admin Fee Cap information in the Administration Fee section.

• Final reconciliation and administration fee charge amounts after cap logic.

Users should review the PDF export before posting when the lease includes cap terms, because the export is often used as supporting documentation for approvals or tenant communication.

Posting Considerations

Review the reconciliation preview before creating entries. Once the preview is accepted and entries are created, the generated charges use the final calculated amounts from the preview.

Important details:

• Caps do not replace the underlying actual expenses; they limit the recoverable tenant charge.

• Category-level caps, Item Cap, and Admin Fee Cap are different controls and may all affect the final result.

• Previously billed amounts still reduce the reconciliation charge after the recoverable total is calculated.

• Admin Fee Cap applies to the administration fee only, not to the item recovery charge.

• Item Cap applies to the recovery item only, not to the administration fee charge.

• If no cap value is configured, the system uses the normal calculated amount.

• If a calculated amount is below the cap, the cap is displayed for review but does not reduce the charge.

• If the preview shows no charges to reconcile for an Item ID, confirm the recovery period, expenses, prior billings, and setup values before posting.

Quick Validation Checklist

Before creating reconciliation entries, confirm:

• The correct property, lease, unit, tenant, and Item ID appear in the preview.

• The recovery period is correct.

• Total Expense and Effective Amount are expected.

• Category-level caps are correct, if used.

• Item Cap is correct and applied only when the calculated item recovery exceeds the cap.

• Previously billed amount is correct.

• Reconciliation Charge is correct.

• Administration Fee basis includes only the intended Subject to Admin Fee categories.

• Admin Fee Percent is correct.

• Admin Fee Cap is correct and applied only when the calculated admin fee exceeds the cap.

• PDF export matches the on-screen preview.

Troubleshooting