Recoveries - Item Cap and Admin Fee Cap

Purpose

Item Cap and Admin Fee Cap are optional Recovery Settings used during the Recoveries process. They help limit recoverable amounts when lease terms include cap language.

Use Item Cap when a recovery Item ID has a maximum recoverable amount for the recovery period.

Use Admin Fee Cap when the administration fee calculation should be limited to a maximum admin fee basis before the Admin Fee Percentage is applied.

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

Where Caps Are Configured

Caps can be configured in either place:

• Leases > Recurring Charges > Recovery Settings

• Setup > Templates > Recovery Templates

When a Recovery Template is applied to a recurring charge, confirm the cap values on the recurring charge before running Reconcile Charges.

Item Cap

Item Cap limits the recovery item amount used to calculate the reconciliation charge.

SIRE applies Item Cap after expense category calculations are complete. This includes category-level caps, pro-rata share, occupancy, and multiplier logic when applicable.

Complete Item Cap when:

• Reconcile Charges is enabled.

• The recurring charge Item ID has a maximum recoverable amount.

• The cap applies to the recovery item, not to the administration fee.

In Recovery Settings, enter Item Cap in the Reconciliation Controls section.

Item Cap behavior:

• SIRE calculates the Total Tenant Share.

• SIRE compares the calculated amount to the Item Cap.

• If the calculated amount is greater than the Item Cap, SIRE uses the Item Cap to calculate the reconciliation charge.

• If the calculated amount is less than or equal to the Item Cap, the cap does not reduce the charge.

• Previously billed amounts are subtracted after the capped or uncapped recoverable amount is determined.

Example:

Admin Fee Cap

Admin Fee Cap limits the Total Tenant Share basis used to calculate the administration fee.

The cap does not directly limit the final Administration Fee Charge. Instead, SIRE compares the admin fee basis to the Admin Fee Cap, uses the lower amount, and then applies the Admin Fee Percentage.

Complete Admin Fee Cap when:

• Charge Administration Fee is enabled.

• Admin Fee Calculation Method is completed.

• Adjustment Item ID is completed.

• Admin Fee Percentage is completed.

• The lease limits the amount used as the admin fee basis.

In Recovery Settings, enter Admin Fee Cap in the Administration Fee section.

Admin Fee Cap behavior:

• SIRE includes only expense categories marked Subject to Admin Fee.

• SIRE calculates the admin fee Total Tenant Share basis.

• SIRE compares that basis to the Admin Fee Cap.

• SIRE uses the lower amount as the basis for the Admin Fee Percentage.

• SIRE creates the Administration Fee Charge from the capped or uncapped basis.

Example:

Difference Between Cap Types

These caps can be used independently or together, depending on the lease terms.

Running Reconcile Charges

After Recovery Settings are complete, use Reconcile Charges to review and post the recovery adjustment.

Go to Tasks > Recoveries > Reconcile Charges.

Complete the required fields:

• Property

• Transaction Date

• GL Posting Date

Select the eligible recovery items to reconcile, then preview the charges.

The selected recurring charge must have:

• A valid Item ID

• Recovery Settings

• Recovery From and Recovery To dates

• Reconciliation setup

• Expense categories and GL accounts

• Actual expenses for the recovery period, when applicable

Reviewing The Preview

Review the Reconcile Charges preview before posting.

The expense detail table may show:

• Expense Category

• Total Expense

• Category Cap

• Effective Amount

• Occupancy

• Unit Sq. Ft.

• Property Sq. Ft.

• Pro-Rata Share

• Tenant Share

• Multiplied Share

The Reconciliation Information section shows:

• Total Tenant Share

• Item Cap, when configured

• Prev Billed

• Reconciliation Charge

The Administration Fee Information section appears when there is an administration fee charge. It shows:

• Total Tenant Share

• Administration Fee Cap, when configured

• Administration Fee Percentage

• Administration Fee Charge

Posting Considerations

Post charges only after confirming the preview.

When charges are posted:

• SIRE creates charges when the reconciliation charge or administration fee charge is not zero.

• SIRE advances the recovery period for the recurring charge.

• SIRE clears actual expenses for the processed period.

• SIRE stores the processed expense history for future reconciliation.

Caps do not change the underlying actual expenses. They limit the amounts used to calculate recoverable charges.

Frequently Asked Questions

Where Do I Configure Item Cap?

Configure Item Cap in Leases > Recurring Charges > Recovery Settings, in the Reconciliation Controls section. It can also be maintained in Setup > Templates > Recovery Templates.

Where Do I Configure Admin Fee Cap?

Configure Admin Fee Cap in Leases > Recurring Charges > Recovery Settings, in the Administration Fee section. It can also be maintained in Setup > Templates > Recovery Templates.

Does Admin Fee Cap Limit The Final Admin Fee Charge?

No. Admin Fee Cap limits the admin fee Total Tenant Share basis. SIRE then applies the Admin Fee Percentage to that capped or uncapped basis.

Does Item Cap Affect The Administration Fee?

No. Item Cap applies to the recovery item amount used for the reconciliation charge. Admin Fee Cap applies separately to the administration fee basis.

Why Did The Cap Not Reduce The Charge?

A cap only reduces the charge when the calculated amount is greater than the configured cap. If the calculated amount is less than or equal to the cap, SIRE uses the calculated amount.

What Is The Difference Between Item Cap And Category Cap?

Category Cap limits an individual expense category before the tenant share is calculated. Item Cap limits the recovery item amount after the recovery calculation is complete.