A rent or CAM escalation mechanism tied to the Consumer Price Index (CPI), intended to adjust costs in line with general inflation. CPI-linked provisions shift inflation risk to tenants.
CPI adjustments compare the index at the start of the adjustment period to the current index to calculate the percentage change. The specific CPI index (All Items, All Urban Consumers, a regional index) and base period must be defined in the lease.
A landlord applied a CPI adjustment using the All Items CPI for a period including the 2021-2022 inflation spike. The lease said 'CPI' without specifying which index. The landlord chose the highest applicable index, producing an 8.5% adjustment when alternatives would have yielded 3.2%.
Specify the exact CPI index series in your lease. Cap CPI increases at a floor and ceiling (e.g., not less than 2%, not more than 5%) to eliminate extreme swing risk.
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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.
