CAM caps: controllable vs. non-controllable expenses
A CAM cap sounds like a simple promise: costs won't grow by more than a set percentage each year. In practice, the cap almost never applies to the whole CAM bill, only to the "controllable" slice of it, and which expenses land in that bucket determines how much protection the cap actually provides.
What's controllable and what isn't
Controllable expenses are generally the ones a landlord has some discretion over, like parking lot maintenance, window washing, trash removal, and landscaping, along with janitorial services and management fees. Non-controllable expenses are the ones nobody negotiates down: property taxes and building insurance typically sit outside any cap entirely, since neither side has much influence over them. A cap that only covers the controllable side can still leave a tenant exposed to a large increase if taxes or insurance spike in a given year.
The typical range, and two ways a cap can work
Caps on controllable expenses commonly run 3% to 10% annually, but the bigger difference is usually cumulative versus non-cumulative. With a cumulative cap, unused room from a quiet year carries forward: if a 5% cap only sees a 3% actual increase in year two, the leftover 2% rolls into year three, letting the landlord recover up to 7% that year. A non-cumulative cap resets every year regardless of what happened before, capping year three at a flat 5% no matter how little was used in year two. Landlords generally prefer cumulative caps for the recovery flexibility; tenants generally prefer non-cumulative ones because they're easier to budget around.
Why the wording is worth checking
None of this is legal advice, and the actual split between controllable and non-controllable in your lease comes down to how your own lease defines it, regardless of what's typical elsewhere. Getting this wrong in either direction has real cost: miscategorize a controllable expense as non-controllable and a cap effectively stops applying to it. RenewSavvy extracts the cap percentage, the cumulative or non-cumulative structure, and which expense categories your lease actually assigns to each bucket, so that distinction doesn't quietly disappear into year-end math.