Specific expense categories that are explicitly carved out of a CAM cap, allowing the landlord to pass them through at actual cost with no ceiling. Common cap exclusions include property taxes, insurance premiums, utilities, and snow removal.
Cap exclusions are lease provisions that enumerate operating expense categories exempt from the cap limitation. They effectively create two tiers: capped expenses (subject to the annual increase limit) and uncapped expenses (passed through without restriction). The financial impact of cap exclusions depends on how broadly they are defined. Narrowly drawn exclusions (taxes and insurance only) leave most expenses capped. Broadly drawn exclusions (all "uncontrollable" expenses without a clear definition) can render the cap nearly meaningless.
A lease caps CAM increases at 5% but excludes "all expenses not within the landlord's reasonable control." The landlord classifies landscaping, elevator maintenance, and janitorial as uncontrollable because they are performed by third-party vendors, leaving almost nothing subject to the cap.
Count the dollar value of excluded expenses as a percentage of total CAM. If exclusions represent more than 40-50% of the total, your cap is providing limited protection. Negotiate to narrow the exclusion list or cap the excluded categories separately.
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Find My OverchargesThis page provides general educational information. It is not legal advice and may not reflect the most current law in your state. Consult a licensed attorney for advice specific to your situation.
