Glossary
Caps & Limits
Catch-Up Provision
Lease language letting a landlord recover a prior year's under-billing, a year actual costs came in below the cap, in a later year. Without this specific clause, a landlord cannot bill a 'makeup' charge for a soft year.
Firm impact
A catch-up charge and a disguised cap violation look identical on a reconciliation statement. Your firm needs to check for the actual clause before accepting either one as legitimate.
How this gets abused
The reconciliation includes a line item labeled 'prior year catch-up' for $9,000. The lease has no catch-up or banking clause and is non-cumulative, so no makeup billing of any kind is authorized.
Practitioner note
Locate the specific catch-up or banking clause in the lease before accepting any makeup charge. Absent that clause, treat the catch-up line as a cap violation and request its removal.
Related terms
FAQ
Questions about catch-up provision
Is a catch-up charge the same as a cumulative cap carryforward?
They can look alike but are not always the same thing. A cumulative cap raises the ceiling for future billing. A catch-up provision lets the landlord bill for a prior year directly. Check which specific clause the lease actually contains.
What should my firm do if a lease has no catch-up clause?
Treat any 'catch-up' or 'makeup' line item as an unauthorized charge and request its removal or supporting lease language. Without the clause, the landlord has no contractual basis to bill it.
You know the term. Now check the math.
Get started to deliver white-label CAM audit reports under your firm brand.