Glossary
Caps & Limits
Dollar Cap (Fixed Cap)
A cap written as a hard dollar ceiling, often per square foot per year, instead of a percentage. It does not depend on a prior year baseline, which makes it simpler to check, but landlords sometimes multiply it against the wrong square footage figure.
Firm impact
A dollar cap is usually easy to verify on its own. But any pro-rata share or square footage error carries straight into the cap ceiling, so a single bad SF number can defeat both the cap and the pro-rata calculation at once.
How this gets abused
The lease sets a $2.00 per square foot cap against the tenant's usable square footage. The landlord instead multiplies the $2.00 rate by the larger rentable square footage figure, producing a higher dollar ceiling than the lease's own SF definition allows.
Practitioner note
Confirm which square footage figure (rentable, usable, or a fixed number stated directly in the lease) the dollar cap is supposed to multiply. A swapped SF figure changes the ceiling without ever touching the stated rate.
Related terms
FAQ
Questions about dollar cap (fixed cap)
Is a dollar cap easier to audit than a percentage cap?
Usually, yes. It does not require a prior year baseline or a compounding assumption. But you still need to confirm the correct square footage figure feeds the calculation.
What is the most common dollar cap error?
Using the wrong square footage denominator, most often rentable square footage where the lease specifies usable square footage, or vice versa. That single swap can move the ceiling by a meaningful margin.
You know the term. Now check the math.
Get started to deliver white-label CAM audit reports under your firm brand.