A CAM cap calculated as the maximum permissible increase in controllable expenses from one year to the next, expressed as a percentage. Also called an annual escalation cap.
The year-over-year cap limits the rate of controllable CAM expense growth. Cumulative caps carry forward unused cap room to future years; non-cumulative caps reset annually. A cumulative cap is significantly more tenant-favorable in practice.
A landlord applied a 5% cap to the prior year's already-capped CAM total, compounding the cap calculation year over year rather than resetting to actual costs - systematically inflating the ceiling above what the cap intended.
Confirm in writing whether your CAM cap is cumulative or non-cumulative and what the cap applies to (actual prior-year costs or prior-year capped costs). These variables dramatically affect the cap's real-world protection.
Worried about year-over-year cap in your lease?
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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.
