CPI Rent Increase Profile
See also How to document #353.
This function is used to implement rent changes based on an index such as the Consumer Price Index. The basic information used to compute the rent change is entered in this profile. The rent change itself is calculated during the Scheduled Commercial Charges, CPI Rent Increase function.
Schedule
Choose the schedule from the Find List.
Next Scheduled
Use this date field to enter the date of the next scheduled charge. If a date in the future is chosen, no charge will be posted until that date is within the Scheduled Through date when the charges are compiled. When a charge is posted, the date will be changed to the next scheduled charge date based on the schedule.
Example: If the Next Scheduled date is March 15 before the charges are posted, and the Schedule is semi-annual, then the Next Scheduled date after posting will be Sept 15.
Schedule Expires
Use this date field to enter the date the schedule expires. No charge will be posted after this date.
Index Abbreviation
You can enter a code of up to 10 characters to identify the index. This is not required unless you will be creating more than one index.
Initial CPI
Enter the value of the CPI when the lease started.
Initial Rent
Enter the rent amount that corresponds with the Initial CPI above.
Reset CPI and Rent after each Increase
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If this box is checked, the Initial CPI and Initial Rent amounts are updated after each scheduled CPI is posted. The new Initial Amounts will be used the next time there is a CPI rent increase. This may affect the rent amount after several scheduled CPI increases are implemented due to rounding.
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If this box is unchecked, new increases are always calculated from the Initial amounts so no rounding discrepencies will occur.
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The minimum and maximum amounts are applied to the Initial CPI and Initial Rent fields. That means that if those amounts or percentages must be applied to each new rent or CPI amount, you must reset after each increase. For example, if the lease has a maximum amount or percentage increase per year, you would have to reset after each increase to be able to compute that maximum.
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Percentage of CPI Increase
Enter here the percent of the CPI increase amount that you want to apply to the rent.
Round to Nearest
Enter the dollar amount to which you want to round the new rent amount.
Apply Increase to Commercial Charges
If this box is checked and the related box (Adjust with CPI Increase) in the CAM, Escalation or Overage Charge page is checked:
The calculated percentage increase, before minimums and maximums are considered, will be applied
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to the Stop and Cap in the CAM Charges
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to the Base and Cap in the Escalation Charges
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to the Breakpoints in the Overage Charges
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If you do not wish to apply the CPI percentage increase to those charges, leave this box unchecked.
For Example:
CPI Profile
Initial CPI – 211.8
Initial Rent - $980
Percentage of CPI Increase - 50%
Round to - $1
On Scheduled Charges page
New CPI - 250
Calculations
% CPI Change - 18.0359
formula: ((New CPI / Old CPI) - Round To amount) x 100
calculations: ((250 / 218.8) - 1) x 100
% Rent Change - 9.0179
formula: % CPI Increase x % CPI Change
calculations: (50% x 18.0359
Initial Rent - 980
Rent Change - 88.38
formula: % Rent Change x Initial Rent
calculations: (9.0179 x 980
CPI Rent - 1,068.38
formula: Initial Rent + Rent Change
calculations: (980 + 88.38
Round to - $1
New Rent - 1,068
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