A cap that limits annual increases only on expenses the landlord can control, such as maintenance, janitorial, and management fees, while excluding uncontrollable costs like property taxes and insurance. This is the most common CAM cap structure in commercial leases.
A controllable expense cap restricts year-over-year growth of a defined subset of operating expenses. The lease must specify which expenses are controllable (capped) and which are uncontrollable (uncapped). Common controllable categories include janitorial, landscaping, repairs, management fees, and administrative costs. Common uncontrollable categories include real estate taxes, insurance premiums, utilities, and snow removal. Disputes arise over categorization when landlords classify capped items as uncontrollable.
A landlord reclassifies routine HVAC maintenance (controllable) as an "emergency repair" (uncontrollable) to bypass the controllable expense cap. The tenant sees the expense appear outside the cap even though the work was scheduled preventive maintenance.
Request a breakdown that separates controllable from uncontrollable expenses. Verify that each line item is classified consistently year over year and matches your lease's definitions. Items that shift categories between years are a red flag.
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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.
