CAM Recovery Feature in Property Manager

-By Karan Karnani

Introduction
• Landlord usually incur certain expenses on the
property which they charge from tenants along
with the basic rent
• Landlord recovers an estimated amount for
Common Area Maintenance Expenses, Taxes
and Insurance charges from tenants each period
and tenants pay the same
• On the year end the tenant share of expenditure
is finalised and reconciled with the amount paid
Overview of CAM Recovery

• Ability to reconcile CAM expenses paid vs.

CAM expenses billed
- CAM (Common Area Maintenance)
- Taxes
- Insurance etc.
• Compares expenses billed in Property to GL
account totals and creates billing term to
bill/credit for the variance
Generic Recovery Calculation
Process
• Set the System Options
• Define the property
• Enter the revenue lease
• Expense Mapping
• Define Expense Class and Area Class
• Make Recovery Agreement
• Extract Expenses from GL
• Approve the Billing Terms and Export them to Receivables
• Calculate Recovery providing calculation period
• Review the terms
• Approve the same term

See the notes below

Module Setups

=NO- Term created for each recovery

line
=YES- Term created for all lines For Automatic Numbering
for a period ; all must successfully
calculated to see results
Setups for Properties

Building/Land
- Property
- Other Fields are
defaulted with
required or
acceptable
values
• UOM
• Gross –
Blank is OK
• Status –
Occupiable
• Customer
Assignable
Contd…

Floor/Parcel
-Occupancy Status
and Customer
Assignable
automatically
default with
required values
Contd…
Office /
Section
– Occupiable and
Customer
Assignable
default in
– Rentable,
Usable,
Assignable
cannot be zero
• Set to amount
to be used in
CAM
calculation
Setups for Lease
• Select Revenue
Lease Class
• Clicking
Primary makes
these fields
required
• Enter
Appropriate
Recovery Type
and Standard,
Customer Name,
Bill To Site See the Notes Below

See the notes below

Contd…
• If Area = 0,
cannot use any
method requiring
Area Class
• MUST specify
Location
• Recoverable
Flag must be
checked for
expense lines to
be included
• Estimated
amount entered
for the expense
lines and later on
reconcile with
actuals
Purpose matches to Expense Type (Expense Map)
Area Class

• Determines which tenants at the Property will be participating in CAM

• Level of Detail for Property and Location Code should match Expense Map
• Space Standard and Recovery Type determine which Tenants area and/or
expenses are excluded

See the notes below

Expense Class

• Determines Billed Expenses to compare to with actuals

• Level of Detail for Expense Type and Property and Location Code should match
Expense Map
• Space Standard and Recovery Type determine which Billings included (can use
this when multiple area classes exist for a property)

See the notes below

Recovery Agreement Methods

Prorata Share
• Based On
– Total Expenses (Expense Classes)
– Total Area (From Location)
– (Optional) Multiple %
– Tenant’s Recoverable Area (Area Classes)
• (Optional) Constraints and Abatements
– Occupancy % (Occupancy Dates)
• Formula
– ((Tenant’s Recoverable Area * Occupancy %) / Total Area) * (Total Expenses) * (Multiple %)
• Special Requirements
– Offices (only place to enter assignable)
– Assignable space per Office
• Data Required (not already entered)
– Area Classes
• (Optional) Constraints and Abatements
– Expense Classes
– Offices (including assignable space)
– (Optional) Multiple %
– Agreements
Contd…

Fixed Rate
• Based On
– Fixed $ per area amount
– Tenant Recoverable Area
• (Optional) Constraints and Abatements
– Occupancy % (Occupancy Dates)
– (Optional) Multiple %
• Formula
– Fixed Rate * Tenant’s Recoverable Area * Occupancy % * Multiple %
• Note: Does not pull actual expenses paid
• Special Requirements
– Tenant Recoverable Area is manually entered as are Constraints and Abatements
• Data Required (not already entered)
– Tenant Recoverable Area
• (Optional) Constraints and Abatements
– (Optional) Multiple %
– Agreements
Contd…

Fixed Amount
• Based On
– Fixed Amount
– (Optional) Constraints and Abatements
• Formula
– Fixed Amount
• Special Requirements
– None
• Note: No different than entering and keeping current the CAM billing terms
• Data Required (not already entered)
– Agreements
– Fixed Amount (each agreement)
– (Optional) Constraints and Abatements
Contd…

Fixed Percentage
• Based On
– Expense Classes
– Manually entered %
• Formula
– Total Expense * Fixed %
• Restrictions
– No constraints or abatements allowed
• Data Required (not already entered)
– Agreements
– Expense Classes
– Fixed % (each tenant on each agreement)
Enter Recovery Agreement

• Lease Name/Number required

• Fills in all fields except Recovery Agreement Name
• Click ‘Include All Lines’ to pull all lines with Recovery Flag checked in the Lease
• Calculation Method defaults to Prorata Share
• Click ‘Complete Line Details’ to continue
Contd…

Click on Include all lines and then Click Next

See the Notes Below

Click on Include all lines and then Click Next

See the notes below

Contd…

• If want to enter constraints, click either ‘Include All Lines’ or ‘Add Another
Row’ (and then select type)
• Select Scope & Relation, Enter Value

• If want to enter Abatements, click either ‘Include All Lines’ or ‘Add Another Row’
(and then select type)
• Select Abatement Type, Enter Abatement Amount and (optional) Abatement
Description
Tenants w/o Recovery Agreement

• Enter Start/End Dates and other desired criteria

• Tenants w/o an agreement are listed
• Click ‘Create Agreement’ to add agreement
• Easier than starting from scratch
• Remember to fill in Agreement Name
Expense Mapping

• Required Parameter for ‘Extract Expenses from GL’

– Mapping can be comprehensive covering all or multiple expense classes or specific to
expense class
• Expense Type equates to Billing Purpose
• Use 31-Dec-4712 to make map effective-to date “forever”
• Do not have to specify both Property and Location, but must specify at least one (or
when Populate Expense Map is run, it errors)
• Specify level of detail that matches accounting
– Example: If Property contains multiple locations and accounting only applies to one,
specify location also
Extract Expenses From GL

Concurrent Program
used to extracting
expenses from GL to
calculate recovery

See the notes below

Alternate to Expense Mapping

If we don’t want to map the expense and extract expenses from GL , we can
manually enter the expenses with the accounting code combination
Generate Expense Class Details

Generate Expense
Class Details for
recovery calculation

See the notes below

Generate Area Class Details

Generate Expense Class Details

for recovery calculation

See the notes below

Point to Consider….

Please make sure that you have approved all

billing terms and Exported them to receivables
– Otherwise system could not calculate the
Recovery Amount
Calculate Recovery

Search the Property and enter the Calculation Period and Click on Calculate Tab.
A request will be fired and you can review the terms on the completion of request.
Recovery Results- Review terms
Term created for the Difference Amount

Change the
• One term would be created for the reconciled amount and get added
Status to
to the lease with the Source recovery Agreement.
Approved
• If reconciled amount is negative then the treatment would be
dependent on the method selected for Negative Line while making
Recovery Agreement