Escalation Charge Profile
Fields
See Commercial How To document 353
The Escalation amount is arrived at in the following way:
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The Base is subtracted from the Source Amount
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A percent of the new figure is calculated using the % in the Escalation profile
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If that amount exceeds the Cap the amount is reduced to the Cap figure
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Example 1:
Suppose the tax bill comes in for $8500 for a building and a portion of that is charged to the tenants as an escalation charge.
Escalation Profile
Escalation % - 2.5
Base - 1000
Cap - 250
Schedule - Semi-annual
Charge ID - Escalation
Account List - contains account Tax
Scheduled Charges, Escalation calculations
Source Amount - 8,500
total of Tax account in owner’s ledger for past 6 months
Escalation % - 2.5
Base - 1000
Charge Amount - 187.50
formula: (Source Amount - Base) x 2.5 / 100
calculations: (8500 - 1000) x 2.5 / 100
Cap - 250
Net Charge - 187.50
An Escalation charge is posted to the tenant for $187.50 and the Next Scheduled date in the Escalation profile is advanced 6 months.
Reconcile
If you clicked Reconcile in the Escalation profile and you have been charging the tenant $20 each month for the past six months either through the Estimated Charges function or the Charge Tenant and marked it an estimated charge, then:
Reconciled - 100
Total Charge - 87.50
187.50 - 100
An Escalation charge is posted to the tenant for $87.50 and the Next Scheduled date in the Escalation profile is advanced 6 months.
Example 2:
Suppose the tax bill comes in for $8500 for a building and a portion of that is charged to the tenants as an escalation charge. The tenant’s Move In date is 4/22/07. The Base and the charge amount will be adjusted accordingly.
Escalation Profile
Escalation % - 2.5
Base - 1000
Cap - 250
Schedule - Semi-annual
Charge ID - Escalation
Account List - contains account Tax
Scheduled Charges, Escalation calculations
Source Amount - 8,500
total of Tax account in owner’s ledger for past 6 months
Escalation % - 2.5
Days - 70 / 181
70=9 days in April, 31 days in May, 30 days in June)
% Days - 38.674
computed from Days above - days occupied divided by days in schedule period (Jan-June)
Adjusted % - 0.9669
formula: percentage x % Days%
calculations: 2.5 x 38.674 / 100 = 0.9669
Base (recalculated) - 386.74
formula: Base x % Days %
calculations: 1000 x 38.674 / 100
Charge Amount - 78.44
formula: Source Amount - Base (recalculated) x Adjusted % / 100
calculations: (8500 - 386.74) x .9669 / 100
Cap - 250
Net Charge - 78.44
An Escalation charge is posted to the tenant for $78.44 and the Next Scheduled date in the Escalation profile is advanced 6 months.
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