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Oracle Property Manager User Guide
Release 12.1
Part Number E13616-04
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Calculating Rent Increases

This chapter details the functionality provided by Oracle Property Manager to calculate rent increases based on fixed percentages or an index that you specify.

This chapter covers the following topics:

Overview of Index Rent Increases

You can use Oracle Property Manager's Rent Increase feature to automatically increase base rent either by a fixed percentage or by an amount proportional to the index change for the remainder of the lease term. Fixed increases raise rental costs, while index increases protect landlords against inflation by raising rent every year in proportion to hikes in consumer price indexes.

Although index leases are not often used when inflation is low, this functionality is very useful in the following lease scenarios:

To use the rent increase feature, you first associate a Rent Increase with an existing, finalized or draft lease. Next, you enter index information into the Index History window. You then complete the following to create your rent increase:

From this point forward, the rent increase is treated as a scheduled rent item. Once you approve and export the rent increase, it is sent to Oracle Payables or Oracle Receivables.

Entering Index History

You can define multiple indices, each indicated by an index type. The index type is a unique name or identifier. In a given index type, you can enter index values with corresponding dates in the Index History window. You can associate an index with multiple leases across operating units. This feature is useful for landlords who may administer hundreds of index leases based on one index.

Multiple rent increase agreements can share index history. You can change or update the values in the Index History window at any time. However, if Oracle Property Manager detects that the changed value are used for rent increase calculations, it gives you the option either to continue with the change or to cancel. If you continue with the change, Oracle Property Manager initiates the Recalculate Index Periods for Updated Index History Lines concurrent program that updates the rent increase agreements affected by this change, including all leases using this value. It does not affect periods that have approved index rent terms. See Recalculate Index Periods for Updated Index History Lines.

An Index Source indicates from where index information is derived and can consist of descriptions you enter.

The multi-row block contains the history of index values over time. For each date, you can enter the actual index amount, two unadjusted figures, and two seasonally adjusted figures.

Important: Unadjusted and seasonally adjusted values are optional and you can create terms based on actual index values only.

Viewing Index History

You can view an index history by choosing the View Index History button on the Rent Increase window. Choosing this button opens up the Index History window with the selected index type displayed.

Entering Rent Increases

To enter rent increases, you first associate the rent increase with an existing lease and specify the rent increase commencement and termination date.

Viewing Leases

You can view leases by choosing the View Lease button on the Rent Increase window. Choosing this button opens up the main lease in the View Leases and Documents window.

Querying a Rent Increase

You can query existing rent increases associated with a specific lease using the Rent Increase window. You can query on a particular index type, lease number, lease class or rent increase number.

Entering a New Rent Increase

To enter a new rent increase, you enter information into the Rent Increase window. You enter critical lease information in the Lease Details region, such as the main lease associated with the rent increase. You also need to enter rent increase information in the Rent Increase Details region, such as the rent increase number, index type, and rent increase commencement and termination dates. You then enter agreement and term template details, and constraints, if applicable.

You can associate multiple index rent agreements with one main lease. For example, you can create one rent increase agreement for fixed base rent increases, another one for operating expense increases, and associate both with the same lease.

Entering an Agreement

You define the rent increase agreement in the Agreement tabbed region of the Rent Increase window. This includes information such as the frequency of rent increase assessment (Assess in Year field) and date assessed. This agreement determines the calculation of rent increases for the entire rent increase term. At the core of this process is the following calculation:

Basis * % = Rent Increase

The following table shows the values in the Agreement tabbed region that affect the rent increase calculation:

Function Fields
Generation of Periods Assess in Years, Date Assessed
Basis Increase On, Gross check box, Basis Type, Initial Basis, Relation
Composition of the percentage Index Finder, Reference Period, Base Year, Base Index, Index Multiplier

Some fields in the Agreement tabbed region contain defaults. The following table shows the defaulted fields and the defaulted values:

Field Default Value
Assess in Years 1
Basis Type Fixed
Negative Rent Ignore
Spread Frequency Monthly
Reference Period Base Year

Entering Defaults

You define default parameters that should be used in rent increase calculations in the Agreement tabbed region (Defaults region) of the Rent Increase window. You enter information such as

Oracle Property Manager creates rent increase terms based on the underlying base rent terms or from a specific term template depending on how you set the Aggregation check box. If you select the Aggregation check box, Oracle Property Manager may create multiple rent increase terms for a single rent increase agreement. For details, see Allocating Rent Increase.

By default, the Aggregation check box is selected and the Term Template field is disabled. You can specify a term template only if you deselect the Aggregation check box.

Use the Term Template LOV if you want to specify attributes for all the payment or billing terms created for the rent increase agreement.

Note: The Term Template LOV only displays term templates that belong to the same operating unit as the lease and the rent increase agreement.

You can also create term templates by clicking the Term Template button and entering term information in the Term Template window. When you access the Term Template window from the Rent Increase window, you can create term templates only for the operating unit to which the rent increase agreement belongs.

Note: You must enter the required attributes for term templates. If you do not provide the required attributes, the application presents an error.

Generating Periods

You can view the timing of rent increase-related events by using the Basis Periods tabbed region on the Rent Increase window. To determine the timing of rent increase related events, the system uses information you entered in the Agreement tabbed region to calculate the following:

You can automatically generate these periods by choosing the Generate Periods button. You can undo the periods by choosing the Undo Periods button. You can choose the Open button to access the period details, including information such as the previous index and the basis amount.

You can also use the Periods tabbed region to calculate rent increases by choosing the Calculate button. The Calculate button triggers the following four calculations.

Calculating for All Periods

You can calculate rent increase amounts for all periods by choosing the Calculate All button on the Rent Increase window. The Calculate All button is enabled only after the periods have been generated. You can also calculate the rent increase individually per period, by selecting the period for which you want to calculate the rent increase, then choosing the Open button. Once inside the Period, you can choose the Calculate button to calculate the rent increase amount for that period.

See: Calculating Rent Increases.

Entering Rent Increase Constraints

You can specify the constraints that apply across all periods of rent increase in the Constraints tabbed region of the Rent Increase window. You can define any floor or ceiling caps on rent due or period-to-period increases. The most common type of constraint is a cap on the increase from year to year, or a minimum increase required from year to year. You can enter up to four constraints: a maximum and a minimum for rent due, and a maximum and a minimum for period-to-period increase.

For each constraint, you can define either an absolute amount increase or relative percentage increase. If you enter an absolute amount as a constraint, then you must enter all constraints as absolute amounts. For example, when you enter a value in the Maximum Amount column, the Maximum Percentage column becomes disabled. All of the remaining constraints must then be entered as amounts.

This is done to insure that upper and lower limits do not cross each other. For example, you enter a rent increase maximum constraint as $4,000 and a minimum constraint as 5% of base rent. To prevent this type of situation, the maximum and minimum constraints are required to be of the same type and the maximum constraint must be equal to or greater than the minimum. If you enter a minimum and maximum for rent due, and a minimum and maximum for period to period increases, then the system calculates the acceptable area for rent as the lesser value of the two maximums, or the greater value of the two minimums.

Prorating Rent Increase Constraints

Use rent increase constraints to specify the lower (minimum) and upper (maximum) limits for rent increases. You can either constrain the rent amount due for a period or specify that the rent increase can be a maximum or minimum of a certain amount over the previous year’s rent. Constraints are applicable to all periods of the rent increase agreement. If the first basis period of the agreement is longer or shorter than the standard basis period, you can specify rules to prorate constraints.

Specifying the Proration Method

When entering constraints, you can select not to prorate or choose one of the proration methods described in the table below.

Constraint Proration Method Description
Days per Year Oracle Property Manager calculates the prorated constraint as follows:
  1. Multiplies the constraint amount by the number of days from the proration period start to the agreement commencement date

  2. Divides the result by the number of days in the year (366 for leap years)

Full and Partial Months per Year Oracle Property Manager calculates the prorated constraint as follows:
  1. Multiplies the constraint amount by the number of months from the proration period start to the agreement commencement date

  2. Divides the result by 12


Oracle Property Manager counts all months, whether partial or complete.

You must also specify the date used to calculate the proration factor. By default, Oracle Property Manager uses the lease start date as the proration period start date. However, you can select any other date earlier than the agreement start date.

You can update the values for constraint proration or the proration period start as required. If you have already calculated rent increase, you must recalculate to modify the rent increase amount. If the rent increase amount changes, Oracle Property Manager creates new terms, deletes any existing draft terms, and creates adjustment terms for the approved terms. The table below provides examples of applying the two methods of prorating constraints in the first basis period.

Step Full and Partial Months per Year Days per Year
Proration period start date June 15, 2002 June 15, 2002
Agreement commencement date January 1, 2003 January 1, 2004
Actual index change percent for the first basis period 5% 5%
Maximum percent 7% 3%
Number of months or days Difference between the proration period start and the agreement commencement date:
7 months
Difference between the proration period start and the agreement commencement date:
565 days
Proration factor Number of months divided by 12:
0.58333
Number of days divided by 365:
1.54795
Maximum percent applicable for the first basis period Maximum percent multiplied by proration factor:
4.083%
Maximum percent multiplied by proration factor:
4.64%
Annualized basis $12,000 $12,000
Annual constrained rent
(In both cases, the prorated maximum constraint is lower than the index change percent)
Annualized basis multiplied by prorated constraint percent:
$490
Annualized basis multiplied by prorated constraint percent:
$557.26
Monthly constrained rent $40.83 $46.44

To enter index history:

the picture is described in the document text

  1. Navigate to the Index History window.

  2. In the Index Type field, enter a unique Index Type name for the index history.

  3. Optionally, enter a source in the Source field.

  4. In the Index Date field, enter the day-month-year combination associated with the index. The format is DD-MMM-YYYY.

  5. Enter the actual index value for each index date.

    Note: You can optionally specify unadjusted and seasonally adjusted values.

  6. Save your input by choosing the save button.

To view an existing rent increase:

  1. Navigate to the Rent Increase Leases window.

  2. Query the rent increase you want to view based on the following:

  3. Choose the Open button to view details of the rent increase in the Rent Increase window.

To enter a new rent increase:

  1. Navigate to the Rent Increase Leases window.

  2. Choose the New button.

  3. In the Lease Details region of the Rent Increase window, select the operating unit for which you want to create an index rent agreement.

  4. Select either the name or number of the lease for which you want to enter a rent increase. When you select the name or number of a lease, Oracle Property Manager automatically provides the other lease-related details, such as class, commencement and termination dates, and the code of the primary location.

    If the lease you selected has a status of Draft, you cannot approve the index rent terms. You can approve the index rent term only after you finalize the main lease.

    Important: The Leases list of values only displays leases that belong to the operating unit you have selected.

  5. Optionally, in the Location Code field, replace the default location with another location associated with the lease.

  6. In the Rent Increase Details region, enter the index type.

  7. Review the default commencement date and termination date of the rent increase.

    Commencement and Termination dates influence the generation of rent increase period(s). The rent increase commencement date cannot be changed once there are any approved payment/billing term in the lease term. The rent increase termination dates can be changed as long as the new termination date postdates the last approved schedule in the main lease that is associated with a rent increase item.

    Note that the commencement date and termination date of the rent increase must fall within the commencement date and termination date of the lease. The rent increase commencement date defaults to one year after the main lease commencement date.

  8. Select the user responsible from the list of values. The user responsible defaults from the user name used to access the Property Manager responsibility.

    Agreement Tabbed Region:

  9. In the Assess in Years field, enter the frequency, in years, that rent increase is assessed. This value cannot be fractional.

  10. Select a value in the Increase On field. The Increase On LOV displays all billing or payment types used in the main lease terms. For example, Base Rent is displayed in the LOV if payment or billing terms for base rent exist in the main lease. If you select a payment or billing type here, Oracle Property Manager sums amounts of all the payments or billings of that type and uses the total as the basis for rent increase calculation. For details, see Calculating the Basis.

  11. Select the Gross check box if you want the calculation of basis amount to consider all the terms defined in the main lease window. The Gross check box and the Increase On field are mutually exclusive.

    Note: If you select the Gross check box, you can click on the Exclude button to view a list of all main lease terms. By default, all the lease terms are selected for inclusion in the basis. If you want any of these terms excluded, you can deselect them here.

  12. Accept the Basis Type field value of Fixed, the default value. When the basis type is Fixed, the basis stays the same from period to period. Also, if the initial basis is defined and the Basis Type field value is Fixed, then it is the initial basis amount that is populated in the annualized basis fields for all periods. You can only specify a reference period of Base Year if the basis type is Fixed.

  13. Negative Rent indicates where the negative rent increase values are allowed by selecting Ignore, This Period, or Next Period in the Negative Rent field. Select the appropriate value. The default is Ignore.

  14. Select the spread frequency. Values include Monthly, One Time, Quarterly, Semiannually and Annually. This field cannot be updated after a rent increase term has been approved. The default is Monthly.

  15. Select the Rounding check box if you want the payment term amount (annualized constrained rent increase amount/spread frequency) rounded.

  16. Enter the date assessed, which indicates the date each period that rent increase is assessed in DD-MMM-YYYY format. The date cannot exceed the 28th of the month entered.

  17. Enter the base year in DD-MMM-YYYY format.

  18. Enter the base index. This is the base index value agreed upon in the lease as the basis for which comparison will be made in the second year. It is defaulted with the value specified in the Index History window for the base year. This value can be overwritten.

  19. Enter the reference period. Values include Base Year, Previous Year - Use assessment date duration, Previous Year - Use previous current CPI. For a reference period of Base Year, only the basis type of fixed can be selected. You cannot select a basis type of Rolling and Compounding for a reference period of Base Year.

  20. If the main lease and rent increase commencement dates are the same, initial basis becomes required.

  21. Specify an index multiplier to increase the index change percentage and hence the rent increase amount. If you set the Default Relation to Greater of or Lesser of, Oracle Property Manager applies the multiplier to the index change percentage before comparing it to the default basis percentage.

  22. Select the index finder. The default is Always Finder Date Without Backbill. Other choices include Always Finder Date With Backbill and Default Most Recent.

  23. Optionally enter a default relation. Values include Fixed Rate Only, Greater Of, Index Only, and Lesser Of. The default is Fixed Rate Only.

  24. Optionally enter a default basis percentage to be used for calculations. This field is disabled when the relationship Index Only is specified. The default is 0 percent.

  25. Enter the index finder months. This is the number that will be added to the Date Assessed to find the Index Finder Date for each period. The default is -2.

  26. Enter the name of the term template you want to use for payment or billing purposes or select the Aggregation check box. You can only select one of the two.

  27. Optionally select the Aggregation check box if you want Property Manager to allocate the net rent increase assessed for a period proportionally across the main lease terms.

  28. Optionally, check the Retain initial basis for calculation check box if you do not want to over-ride the initial basis when the rent increase is recalculated. If the check box is checked, and the initial basis field is not null, the initial basis is not overridden. The default value is unchecked.

  29. To view the term template, choose the Term Template button. You can create a new term template and associate it with multiple increase agreements.

    Basis Periods Tabbed Region:

  30. Optionally, override the defaulted value for annualized basis. The default annualized basis is calculated as the sum of annualized amounts of terms from the main lease, which lie between the Basis Start and End dates and value in the Increase On field.

    Note: Oracle Property Manager does not include terms that have a frequency of One Time while calculating the annualized basis.

  31. Select the relationship. Other values include Greater Of, Lesser Of and Index Only.

  32. Optionally, enter the index change percent. The default is the system calculated index change. Factors in calculation include the reference period, the index type, and the index finder. This field is mandatory if the relation is Index Only, Greater Of, or Lesser Of.

  33. You must enter basis change percent if you are using fixed rent increases (all relations other than Index Only).

  34. Unconstrained Rent Due is the calculated annualized rent increase amount for the period.

  35. Constrained Rent Due is the calculated annualized rent increase with constraints applied. The constraints applied are from the Constraints window and negative rent from the Agreement tab.

  36. Optionally, choose the Open button to view period details, including the period, index details, relationship and basis. These values default from prior input completed in other tabs and windows.

  37. Optionally, click Terms to access the Term Details window and review term details, including location, purpose, type, frequency, status, and normalization. You enter the values displayed here in other tabs and windows. However, you can modify the values if required. For example, you can select or deselect the Normalize check box depending on whether you want to normalize the rent increase term. You can also change the status of the term to Approved if you want to transfer it to the main lease.

    Important: Once you approve the term, you cannot modify it.

    Constraints Tabbed Region:

  38. Specify whether you want to prorate constraints in partial periods and the method you want to use. If you select to prorate constraints, you must specify the date from which the proration begins.

  39. Optionally choose an Increase Over constraint. The default is No Carry Forward. See: Entering Rent Increases

  40. If you want to enter constraints, choose the scope: either Period to Period or Rent Due.

  41. Enter either a minimum amount or a minimum percentage. These fields are mutually exclusive. If you enter one, the other field is disabled.

  42. Enter either a maximum amount or a maximum percentage. These fields are mutually exclusive. If you enter one, the other field is disabled.

Related Topics

Entering Rent Increase Constraints, Oracle Property Manager User Guide

Calculating Rent Increases

When you click Calculate on the Basis Periods tabbed region, Oracle Property Manager determines the following:

The constrained rent increase is an annualized amount that results in a term for a particular period. Rent increase term details are based on the selected term template. The term start date is the greater of the date assessed or the current date. The end date is the lease termination date.

Note: The Term Details window displays the annualized amount divided by the spread frequency, or the recurring amount due. If the frequency is monthly, the annualized amount is divided by 12.

When you approve a term, it is transferred to the main lease and schedules and items are created.

Note: You cannot modify approved terms or a period that contains an approved term.

Timing Rent Increase Events

Oracle Property Manager uses information from the Agreement tabbed region of the Rent Increase window to time rent increase events. A period is the time frame used to assess rent increases. For each period, Oracle Property Manager records the following information:

Date Assessed

To generate periods, you must define the assessment frequency (Assess in Years field) in the Agreement tabbed region of the Rent Increase window. The assessment frequency is stated in multiples of a year. For example, if you enter 2, then rent increase is assessed every two years.

The date that the rent increase is assessed is determined as follows:

Every year, the rent increases begin from the date in the Date Assessed field. When you change the date assessed or assess in years, Oracle Property Manager regenerates periods and recalculates rent increase amounts if rent increase calculations have been performed for the periods.

If the main lease and the rent increase agreement share commencement dates, then the basis start and end dates are blank for the first period because it lies outside the lease term. The value of the initial basis is then used as the annualized basis for the first period. The initial basis is required.

Index Finder Date

The value of the Index Finder Date field in the Basis Periods tabbed region is the sum of the date assessed and index finder months. This value is calculated for each period. However, you can update the default value. The index finder date is used to select the current index value.

Basis Start and End Dates

The basis start and end dates comprise the year before the date assessed. For example, if the date assessed is January 01, 2002, then the basis period starts on January 01, 2001 and ends December 31, 2001.

The application picks up the terms that fall within the basis date range for calculating the basis.

Rent Increase Date Examples

The following example illustrates how Oracle Property Manager derives the assessment date and the basis start and end dates, assuming the dates shown in the first table.

Type of Date Date
Lease Commencement Date 01-JAN-2000
Lease Termination Date 31-DEC-2004
Rent Increase Commencement Date 15-JAN-2001
Rent Increase Termination Date 31-DEC-2003
Assessment Date 03-MAR-2001

Derived Dates

Period Number Assessment Date Basis Start Basis End
1 15-JAN-2001 15-JAN-2000 14-JAN-2001
2 03-MAR-2001 03-MAR-2000 02-MAR-2001
3 03-MAR-2002 03-MAR-2001 02-MAR-2002
4 03-MAR-2003 03-MAR-2002 02-MAR-2003

Modifying Periods

After you generate periods and a payment or billing term is approved, you can modify only the Rent Increase Termination Date in the header region of the Rent Increase window. When you extend a rent increase agreement, a concurrent program automatically generates additional periods. See: Generate Rent Increase Periods.

When early terminating rent increases, the application first verifies that there are no approved and transferred invoices beyond the new termination date. If invoices exist (that is, the last invoice was exported or approved on December 31, 2003, and you try to early terminate rent increase on August 31, 2003, the application displays an error.

If there is no conflict, the concurrent program deletes the rent increase periods past the early termination date. In other words, it checks whether transferred rent increase terms have been approved or are still in Draft status. If rent increase terms are not associated with approved schedules, they can be deleted.

Determining the Basis

Oracle Property Manager calculates the basis as the first step in calculating rent increases.

Oracle Property Manager uses the Increase On (or Gross check box), Initial Basis, and Basis Type fields in the Agreement tabbed region to determine the basis. The Increase On field and Gross check box are mutually exclusive. If you select the Gross check box, the Increase On field is disabled.

Note: The Calculate Annualized Basis for Index Rent system option affects the calculation of annualized basis. For more information, see: System Options in Oracle Property Manager, Oracle Property Manager Implementation Guide.

You can click Basis Terms to view all main lease terms that are of the type selected in the Increase On field or, if you have selected the Gross check box, all terms. You can then select the terms you want to include in the basis.

Note: If you have set the Include Terms As Rent Increase Basis By Default system option to No, Oracle Property Manager deselects all the terms displayed in the Basis Terms window by default. Conversely, Oracle Property Manager includes all the terms displayed in the Basis Terms window if you set the system option to Yes.

Example: Impact of Basis Type

Assume a four-year lease with a rent increase commencing in the second year. The tables below show the base rent amounts and then the annualized basis and rent increase amounts that would result for each basis types.

Fixed Basis

Year Base Rent Annualized Basis Rent Increase
Year 1 $12,000 NA NA
Year 2 $18,000 $12,000 $1,200
Year 3 $24,000 $12,000 $1,200
Year 4 $25,000 $12,000 $1,200

Rolling Basis

Year Base Rent Annualized Basis Rent Increase
Year 1 $12,000 NA NA
Year 2 $18,000 $12,000 $1,200
Year 3 $24,000 $18,000 $1,800
Year 4 $25,000 $24,000 $2,400

Compound Basis

Year Base Rent Annualized Basis Rent Increase
Year 1 $12,000 NA NA
Year 2 $18,000 $12,000 $1,200
Year 3 $24,000 $19,200 $1,920
Year 4 $25,000 $27,120 $2,712

Calculating the Percentage

The percentage can be a fixed user-defined value, a changing percentage determined by an index, the greater of the two, or the lesser of the two. You select among these four choices using the Default Relation field on the Agreement tab. The default relation determines the value of the Relationship field in the Basis Periods tab. However, you can override this value for any period.

You enter a fixed percent amount in the Default Basis field on the Agreement tab. The default basis determines the value of the Basis Change % field for each period. You can override this value.

Oracle Property Manager derives the index change percentage by comparing the current index value with the previous index value. Oracle Property Manager applies the index multiplier to the index change percentage to arrive at the adjusted index change percentage.

Thus, the Default Relation, Default Basis, and Index Type fields on the Agreement tab determine the default values for the Relationship, Basis Change %, and Index Change % fields, respectively, on the Basis Periods tab. The values on this tab are used in the calculation for each period.

The value selected for Relationship determines the source for the percentage, as follows:

The following table indicates whether the Index Change % or the Basis Change % is required, given the relation indicated. If the Index % is required, then the Reference Period in the Agreement tabbed region is also required.

Relationship Index Change % Required Basis Change % Required
Use Index Y N
Use Basis N Y
The Greater Of Y Y
The Lesser Of Y Y

The Index Change % is calculated as the percent change in the index over an earlier index value. The previous index value used depends on the value in the Reference Period field, as follows:

Base Year: The prior index value is from the base year. Thus, Index Change % = (Current Index - Base Index)/ Base Index

Previous Year - Use previous current CPI: The prior index value is that from the previous period, as scheduled. Thus, Index Change % = (Current Index - Previous Index)/ Previous Index

Previous Year - Use assessment date duration: The Index Change % is calculated as with Previous Year - Use Previous Current CPI, with one exception. If Index Finder is set to Default Most Recent, and the current index value is not available, Oracle Property Manager locates the latest available index value and uses this earlier index value as the current index. Under these conditions, Oracle Property Manager uses an earlier index value for the prior index as well, so that the value of Index Change % is calculated over the same duration.

The following example illustrates the difference between the two Previous Year selections. Assume:

Oracle Property Manager uses the index available for September 1, 2006 as the current index. The value of the previous index depends on the value of Reference Period:

If the Index Change % is required in any of the rent increase periods, you must specify a reference period in the Agreement tabbed region. The base index is provided in the Agreement tabbed region.

Creating Rent Increase Terms

This section describes the process of creating rent increase terms after the basis and the percent are determined.

Note: The examples and scenarios outlined in this section are based on the assumption that terms are not being allocated. For information on creating allocated terms, see: Allocating Rent Increase.

Oracle Property Manager creates rent increase terms depending on how you set the Default Relation field and, if you are using an index, whether you calculate rent increase on time (the current date is prior to the Date Assessed) or late (the current date is later than the Date Assessed).

Important: If you set the Default Relation to Fixed Rate Only, then Oracle Property Manager always generates a single, recurring rent increase term for a period.

The following table describes the rent increase terms created if you use an index to calculate rent increase on time.

Default Relation Number of Terms
Index Only One recurring term
Lesser Of One recurring term
Greater Of Two terms:
  1. One term for the minimum amount (normalized, if you select the Normalize check box in the Term Details window)

  2. One term for the amount that equals the difference between the default basis percent and the actual index percent change.

The following sections describe the rent increase terms created when you use an index to calculate rent increase late.

Creating Terms when the Default Relation is Index Only or Lesser Of

The following table explains how Oracle Property Manager creates rent increase terms when you set the default relation to Index Only or Lesser Of and calculate rent increase late. These selections decide whether Oracle Property Manager:

  1. Calculates the rent increase if the specified index value is not available.

  2. Creates a back bill when the rent increase is calculated late. (after the assessment date.)

    Note: Use the Legacy Cutoff Date system option to specify whether Oracle Property Manager should create backbilled terms. For more information, see: System Options in Oracle Property Manager, Oracle Property Manager Implementation Guide.

Index Finder Effect on Rent Increase Terms
Always Finder Date with Backbill Oracle Property Manager calculates the rent increase amount only after an index is available. It creates a recurring term starting from the next scheduled invoice period and a one-time back bill term. If the current index value is not available, it displays an error message.
Always use Finder Date without Backbill Oracle Property Manager calculates the rent increase amount only after an index is available. It creates a recurring term starting from the next scheduled invoice period.
Default Most Recent Oracle Property Manager calculates rent increase using the most recent index available if the current value is not available. It creates a recurring term starting from the next scheduled invoice period and a one-time back bill term. If the current index value is not available, it displays an error message.

A back bill is a separate term that is created to cover the period between the assessment date and the calculation date, in cases where the rent increase is calculated after the assessment date. For example, if the assessment date is January 01 and rent increase is calculated on April 01, two terms are created. The regular recurring rent increase term starts April 01 instead of January 01. A one time back bill term is created for the three months (January through March) missed. If the calculated rent increase amount is 100 per month, the back bill term will be for 3000. The payment start and end date for the back bill term is the current date.

Note: If the basis type is compounded, the back-billed rent increase is included in the next annual rent increase.

Oracle Property Manager performs the following steps to create the recurring rent increase term.

  1. Calculates the term amount as follows:

    Rent increase amount = the constrained annual rent increase / the spread frequency based on which base rent is paid

    Note: The spread frequency is displayed in the Agreement tabbed region of the Rent Increase window. The rent increase has the same frequency as the base rent.

    The annual rent increase appears in the Rent Increase window.

  2. Creates a term from the current date or the Date Assessed (whichever is later) to the end of the lease term.

  3. Runs a concurrent program to transfer the term to the main lease after you approve the rent increase term. Corresponding schedules are created in the Authorize Payments and Billings window. See: Approve Rent Increase Terms.

    You can then authorize the schedule and export the amount to Oracle Payables or Oracle Receivables as a regular schedule item.

Calculating Rent Increase when the Default Relation is Greater Of

If you are calculating rent increase late and the Index Finder is Always Finder Date with Backbill, then three terms are created as follows:

  1. A term for the normalized minimum amount

  2. A term for the amount that equals the difference between the default basis percent and the actual index percent change to be paid from the current date to the end of the lease term

  3. A term for the one-time back bill amount

When the minimum amount is assessed at a later date, Oracle Property Manager may create up to four terms.

  1. A term for the recurring minimum amount

  2. A term for the one-time back bill amount

  3. Two terms created when the index is available

In all other cases, Oracle Property Manager creates a minimum of two payment or billing terms.

Determining the Length of Rent Increase Terms

After calculating rent increase, you create terms for the rent increase amount and, if required, for any back bill amount. Use the profile option PN: Rent Increase Term End Date to determine the length of regular rent increase terms. You can specify that Oracle Property Manager should create rent increase terms either up to the end of the lease or the end of the agreement. Consider the following example:

Agreement dates: January 1, 2000 to December 31, 2009

Lease end date: December 31, 2010

If you calculate rent increase on January 1, 2007, on time, the length of the term is one of the following, based on the profile option:

Note: Use the Smallest Term Amount system option to specify the smallest value for which Oracle Property Manager creates index rent terms and auto generated adjusted terms. For more information, see: System Options in Oracle Property Manager, Oracle Property Manager Implementation Guide.

Creating Terms When Reference Period is Base Year

When you select base year as the reference period, Oracle Property Manager allows you to specify that rent increase terms must terminate on the end date of the assessment period rather than the end of the agreement or the lease. Consider the example provided above with additional information in the following table:

Required Information Value
Rent increase end date End of Agreement
Base year 2000
Reference period Base Year
Basis type Fixed
Assess in years 1
Initial basis $20,000
Index in base year 100
Index in first period 110
Index in second period 120
Date assessed January 1, 2007

When you calculate rent increase for the first period, the index change percent is 10 percent and, consequently, the rent increase is $2,000. The rent increase term spans from 2001 to 2009, when the agreement ends.

When you calculate rent increase for the second period, the index change percent is 20 percent and consequently, the rent increase is $4,000. This rent increase term spans from 2002 to 2009. Therefore, in the year 2002, the tenant pays $26,000 (base rent plus $6,000 as the total rent increase) even though this subsequent assessment naturally incorporates the prior increase in the index. In such cases, you may want to replace the rent increase terms created for previous assessment periods rather than add to them.

The profile option PN: End Date for Base Year Reference Rent Increase Terms determines the length of the rent increase term in such cases. To continue the example provided above, assume that you have set the profile option to Assessment Period End. If you calculate rent increase on time, then rent increase terms have the following start and end dates:

Important: The change in index takes care of the increase if you base rent increase on an index. However, if you use a fixed rate, you must manually change the fixed rate for each period to increment the rent increase.

Creating Rent Increase Terms After Late Calculations

If you select to create terms up to the end of the assessment period only and calculate rent increase for a period after the start date of the next, Oracle Property Manager does not create a rent increase term. It only creates a back bill term for the total amount. Assume the conditions listed in the earlier example, along with the following:

Index finder: Always Finder Date with Backbill

Monthly rent increase amount: $1,000

You calculate rent increase for the first period (January 1, 2007 to December 31, 2008) on February 15, 2009. Oracle Property Manager multiplies the monthly rent increase ($1,000) by the number of months in the period (24) to calculate the back bill term amount: $24,000.

The back bill is a one-time or a recurring term depending on how you perform late calculations. See Calculating Rent Increase After the Assessment Date.

Important: If you select not to create a back bill, Oracle Property Manager does not create any term for the rent increase amount.

Normalizing Rent Increase Terms

The following rules relating to normalization affect the creation of rent increase terms.

Example: Normalization of Rent Increase Terms

The following example illustrates normalization of rent increase terms when the default relation is Greater Of.

A rent increase agreement stipulates that a tenant should pay an increase of at least 5 percent. The 5 percent portion of the rent increase can be normalized because it is known in advance and approved (transferred to the main lease.) The index is not available when the lease is signed, but when, 4 months later, say on May 01, 2001 the index is available, and if the new percentage is 12 percent, an additional amount (7 percent) must be paid.

Note that this additional amount is not normalized.

To summarize, two payment terms are created as follows:

  1. A one-time back billed amount for the duration of 4 months (4 X $70 = $280)

  2. A recurring rent increase of $ 70 from May 01, 2001 to the end of the lease term

Dealing with Increases over Constraints

You can use the Increase Over Constraints field in the Constraints tab of the Rent Increase window to decide how amounts that exceed the rent increase maximum constraints to subsequent periods.

You can define the treatment of the amounts that exceed the rent increase maximum constraints. The available options include the following:

Note: If the Carry Forward Percent or Carry Forward Amount constraint option is used, you can only calculate unconstrained rent and constrained rent for a single period if the prior period has been successfully calculated.

Changing Options

You can modify the value of the Increase Over Constraints field after rent increase has been calculated but not after terms are approved.

When you change the value of this field, previously generated periods and amounts are deleted and new periods and amounts are generated.

No Carry Forward

If you select No Carry Forward, amounts in excess of the maximum constraints are not carried forward when the calculated CPI or the basis percentage rent increase exceeds the maximum constrained increase allowed.

Carry Forward Percentage

If you select Carry Forward Percentage, the amounts in excess of the rent increase maximum constraints are carried forward in the form of a percentage.

Example of Carry Forward Percentage: Scenario 1

This example is based on the following assumptions:

The following table illustrates the constraints and calculated amounts for the example. The key for this table is:

Base Year Ann Basis Basis Change % Constraint Amount Constraint % Carry Forward % Uncon Rent Due Con Rent Due
2001 12,000 12 1300 NA 1.167% 1440 1300
2002 12,000 9 NA NA 0% 1080 1220
2003 12,000 8.5 1100 NA 0% 1020 1100

Example of Carry Forward Percentage: Scenario 2

This example is based on the following assumptions:

The following table illustrates the constraints and calculated amounts for the example. The key for this table is:

Base Year Ann Basis Basis Change % Constraint Amount Constraint % Carry Forward % Uncon Rent Due Con Rent Due
2001 12,000 13 NA 10% 3% 1560 1200
2002 15,000 8 NA 10% 1% 1200 1500
2003 20,000 1 NA 2 0% 200 400

Example of Carry Forward Percentage: Scenario 3

This example is based on the following assumptions:

The following table illustrates the constraints and calculated amounts for the example.

The key for this table is:

Base Year Ann Basis Basis Change % Constraint Amount Constraint % Carry Forward % Uncon Rent Due Con Rent Due
2001 12,000 12 1300 NA 1.167% 1440 1300
2002 20,000 -5 NA NA 0% -1000 0
2003 12,000 9 NA NA 0% 1080 313.34

Carry Forward Amount

If you select Carry Forward Amount, the amounts in excess of the rent increase maximum constraints are carried forward to subsequent periods as numeric amounts.

Example of Carry Forward Amount: Scenario 1

This example is based on the following assumptions:

The following table illustrates the constraints and calculated amounts for the example.

The key for this table is:

Base Year Ann Basis Basis Change % Constraint Amt Constraint % Carry Fwd Amt Uncon Rent Due Con Rent Due
2001 12,000 12 1300 NA 140 1440 1300
2002 12,000 9 NA NA 0 1080 1220
2003 12,000 8.5 1100 NA 0 1020 1100

Example of Carry Forward Amount: Scenario 2

This example is based on the following assumptions:

The following table illustrates the constraints and calculated amounts for the example.

The key for this table is:

Base Year Ann Basis Basis Change % Constraint Amt Constraint % Carry Fwd Amt Uncon Rent Due Con Rent Due
2001 12,000 13 NA 10% 360 1560 1300
2002 15,000 8 NA 10% 60 1200 1500
2003 20,000 1 NA 2% 0 200 400

Calculating Rent Increase After the Assessment Date

When setting up rent increase agreements, you specify an index finder to determine how rent increase terms are created when you calculate rent increase late, that is, after the assessment date. You must select one of the following index finder values:

Use the profile option PN: Rent Increase Calculated After Assessment Date to determine whether Oracle Property Manager creates back bill terms, as described below.

Allocating Rent Increase

When you select the Aggregation check box, Oracle Property Manager creates rent increase terms based on the underlying main lease terms. Oracle Property Manager creates a single rent increase term (for each assessment period) for a unique combination of key term details. Therefore, one term is created for all main lease terms that share the key term details. When multiple terms are required, Oracle Property Manager allocates the total increase to these terms in proportion to the amounts in the main lease terms. For example, if you have two tenants on the same lease, with separate terms for each tenant, Oracle Property Manager creates a new rent increase term for each tenant, reflecting the additional amounts owed by each tenant.

Oracle Property Manager considers the following term details when allocating a rent increase:

Creating Allocated Terms

The following example shows how multiple terms are created as a result of allocation. When you select the Aggregation check box, the resulting escalation (rent increase) terms are driven by the underlying lease terms specifically from the type, purpose, frequency, GL accounts, customer/vendor name, and customer/vendor site. The terms are initially filtered by the value in the Increase On field or the Gross check box. After this initial filtering, the selected payment/billing terms are further filtered into their unique combinations.

Rent Increase Allocation Example

Main lease terms:

Num Purpose Type Cust Cust Site GL Acct and % Split Start and End Date Amount
1 Rent Base Rent Vendor 1 Site 1 Account A: 60%
Account B: 40%
01-JAN-01 31-DEC-03 1000
2 Rent Base Rent Vendor 1 Site 1 Account C: 100% 01-JAN-01 31-DEC-03 1000
3 Rent Base Rent Vendor 2 Site 2 Account C: 100% 01-JAN-01 31-DEC-03 100

Increase Periods:

Num Effective Date Start and End Date Increase On Increase Type %
1 01-JAN-02 01-JAN-02 31-DEC-04 Base Rent Fixed 10
2 01-JAN-03 01-JAN-03 31-DEC-04 Base Rent Fixed 10

Index Increase Terms for Effective Date: 01-JAN-02:

Num Purpose Type Cust Cust Site GL Acct and % Split Start and End Date Amount
1 Rent Base Rent Vendor 1 Site 1 Account A: 60%
Account B: 40%
01-JAN-02 31-DEC-03 100
2 Rent Base Rent Vendor 1 Site 1 Account C: 100% 01-JAN-02 31-DEC-03 100
3 Rent Base Rent Vendor 2 Site 2 Account C: 100% 01-JAN-02 31-DEC-03 10

Index Increase Terms for Effective Date: 01-JAN-03:

Num Purpose Type Cust Cust Site GL Acct and % Split Start and End Date Amount
1 Rent Base Rent Vendor 1 Site 1 Account A: 60%
Account B: 40%
01-JAN-03 31-DEC-03 110
2 Rent Base Rent Vendor 1 Site 1 Account C: 100% 01-JAN-03 31-DEC-03 110
3 Rent Base Rent Vendor 2 Site 2 Account C: 100% 01-JAN-02 31-DEC-03 11

Extending and Contracting Rent Increase Agreements

This section describes the implications of extending or contracting rent increase agreements either independently, or as part of a lease extension or contraction.

Extending Rent Increase Agreements

You extend a rent increase agreement by modifying the agreement termination date to any date before or equal to the effective end date of the associated lease. In addition, when you expand or extend a lease, you can select to extend associated rent increase agreements that terminate on the previous lease end date. See Extending or Expanding Leases.

Oracle Property Manager behaves as follows when extending an agreement:

Note: Oracle Property Manager extends rent increase terms only if you have set the Extend Index Rent Terms upon Lease Extension system option to Yes. See System Options in Property Manager, Oracle Property Manager User Guide.

The following table describes how Oracle Property Manager deals with rent increase terms when extending or expanding a lease:

Terms Created To Implication
End of the lease Oracle Property Manager extends rent increase terms that end on the previous lease end date to the new effective end date of the lease even if you select not to extend the associated rent increase agreement.
End of the agreement If you select to extend rent increase agreements, Oracle Property Manager extends existing terms that end on the agreement termination date to the new termination date.
Oracle Property Manager also creates rent increase terms for the new assessment periods. Each term ends on the new agreement termination date.
End of the assessment period If you select to extend rent increase agreements, Oracle Property Manager creates rent increase terms for the new assessment periods. Terms end on the end date of the associated period.

Oracle Property Manager deals with rent increase term normalization as it does in the case of other normalized terms. See Normalizing Terms During Lease Expansion.

Related Topics

System Options, Oracle Property Manager User Guide

Lease Modifications, Oracle Property Manager User Guide

Contracting Rent Increase Agreements

You contract rent increase agreements by modifying the agreement termination date. When you contract an agreement, Oracle Property Manager deletes all basis periods that start after the new agreement termination date and contracts the periods that start before but end after the new agreement termination date. Oracle Property Manager then recalculates rent increase for affected basis periods. It deals with rent increase terms based on term length, as described below.

Contracting Agreements When Contracting Leases

Oracle Property Manager automatically contracts rent increase agreements when you contract the associated lease to a date earlier than the agreement termination date. Based on the new agreement termination date, Oracle Property Manager deletes, or contracts basis periods and recalculates rent increase for those periods. It deals with rent increase terms as described in the table below.

Location Description
Rent Increase Agreement Oracle Property Manager performs the following tasks in the rent increase agreement:
  • Deletes draft terms

  • Deletes approved terms that begin after the new lease termination date

  • Contracts approved terms that end after the new lease termination date

  • Creates new draft terms

Lease Oracle Property Manager performs the following tasks in the lease:
  • Deletes terms that begin after the new lease termination date and have no approved schedules

  • Contracts terms that begin after the new lease termination date and have approved schedules to make them one-time terms with zero as amount. It also creates adjustment items for the terms' approved items.

  • Contracts terms that end after the new lease termination date. It creates adjustment items for approved amounts after the new lease termination date.

New or contracted rent increase terms end on the lease termination date, agreement termination date, or the assessment period end date, as appropriate.

Important: Oracle Property Manager treats rent increase terms with one or more approved schedules like any other lease term. That is, it deletes or contracts terms, and creates adjustments as required. For more information, see Contracting Finalized Leases.

Determining the Agreement Termination Date

When automatically contracting a rent increase agreement, Oracle Property Manager determines the agreement termination date based on the profile option PN: Allow Early Termination Before Last Approved Schedule, as described in the table below.

Allow Contraction Before Last Approved Schedule Lease has Normalized Terms Impact
Yes Yes or No Oracle Property Manager contracts the agreement to the new lease termination date.
No Yes Oracle Property Manager contracts the agreement to the new lease termination date.

Important: The restrictions on lease termination dates in the case of a lease with normalized terms are the same as those for rent increase agreement termination.

No No Oracle Property Manager uses the later of the following dates as the new agreement termination date:
  • New lease termination date

  • Item end date of the last approved rent increase term item

Consider the following example: You want to contract a lease for which you have approved schedules up to April 1, 2007. The lease has an associated rent increase agreement. The rent increase term, included in the schedule for April 2007, is a quarterly term. Thus, its item end date is June 30, 2007. Therefore, while you can contract the lease to a date as early as April 30 you cannot contract the rent increase agreement to a date earlier than June 30.

Related Topics

Determining the Length of Rent Increase Terms

Lease Modifications, Oracle Property Manager User Guide

Rent Increase Window References

This section contains window references for the windows you use to define rent increases.

Rent Increase Window Reference

Lease Details Region

Operating Unit. The operating unit to which the rent agreement belongs.

Name. The main lease name is selected from an LOV of existing leases. If the lease number is already selected, the name will default. This field is required.

Number. The main lease number is selected from an LOV of existing leases. If the lease name is already selected, the number will default. This field is required.

Class. The lease class is a display-only field that defaults from the Lease window.

Commencement Date. The lease commencement date is a display-only date field that defaults from the Lease window.

Termination Date. The lease termination date is a display-only field that defaults from the Lease window.

Location Code. The Location Code that is associated with the main lease. The system defaults the primary location associated with the main lease. You can override this location with any of the other locations that are associated with the same lease that are not primary locations.

Rent Increase Details Region

Number. This field is required. Depending on how the Automatic Number Generation (Rent Increase) system option has been set, you may have to specify a unique rent increase number manually. See System Options in Oracle Property Manager, Oracle Property Manager Implementation Guide.

Index Type. The name of the index you want to use with the rent increase agreement. You define Index Types in the Index History window. This field is required.

Commencement Date. The rent increase commencement date must lie between the main lease commencement and termination dates. It defaults to one year greater than the commencement date of the lease, but can be overridden. It is used to generate rent increase periods. This field is required.

Termination Date. The rent increase termination date must lie between the main lease commencement and termination dates and must be equal to, or later than, the rent increase commencement date. It defaults to the termination date of the lease, but can be overridden. The rent increase termination date cannot be greater than the main lease termination date. This is the last date by which rent increases can be evaluated. This field is required.

User Responsible. The Username LOV is similar to the Abstracted by LOV used in the Lease window. This field is required.

Agreement Tabbed Region

Details Region

Assess in Years. The frequency, in years, that rent increase is assessed. It can be any positive, whole integer. This field is used to generate periods in the Periods tabbed region. This field is required.

Date Assessed. The date of every year that fixed increase or rent increase is assessed, and expressed as day-month-year, e.g. DD-MMM-YYYY. The date cannot exceed the 28th day of any month. This field is required.

Base Year. The base year value is required if the reference period is base year. The base year is formatted as DD-MMM-YY.

Base Index. The base index value agreed upon in the lease as the basis for which comparison will be made in the second year. The system can default the base index value by using the index type from the Rent Increase Details region and the Base Year. You can overwrite this value

Increase On. The Increase On field is a validated list of values. If there is no base rent in the main lease, then base rent will not appear in this LOV. This field brings up all types defined for the main lease associated with this rent increase agreement. If you select Operating Expenses, the system adds all the payments or billings of the type operating expense for the period duration. A payment/billing term of Base Rent must exist in the main lease for base rent to appear in the LOV. This field is required.

Note: Changing the value of the Increase On field after calculating rent increase clears the initial basis amount. The value in the Initial Basis field is recalculated during the next rent increase calculation.

Gross check box. The field denotes if the system should take into account all the terms defined in the main lease for calculation of the basis amount. The Gross check box and the Increase On fields are mutually exclusive.

Reference Period. The Reference period is a poplist containing the values of Base Year, Previous Year-Use Assessment Date Duration, or Previous Year-Use Previous Current CPI.

Basis Type. The basis type can be Fixed, Rolling, or Compound. If fixed, the basis stays the same from period to period. If Rolling, the basis for each new period is calculated as selecting all payment/billing items, depending on the value of the Increase On field, that lie within the basis start and end dates. If the basis is compounded, then the system will add this year's rent, plus the previous year's rent increase, to calculate the new basis, Also, if the initial basis is defined and the Basis Type is fixed, then it is the initial basis amount that is populated in the annualized basis fields for all periods. This field is required.

Index Finder. The Index Finder field is a scroll box containing three values and a contingency default if the index is unavailable. The three values include the following:

Defaults Region

Default Relation. The default relation value is selected from four available options, including; Greater Of, Lesser Of, Fixed Rate Only, and Index Only

Default Basis %. The optional default basis percentage to be used for calculations. This field is disabled when the relationship Index Only is specified.

This field is required and defaults to the value Default Most Recent.

Term Template. The term template used for payment/billing purposes. The LOV will only display existing term templates. This field is required.

Negative Rent. This field is a pop list with three possible values, including the following:

The default is to disallow negative rent increase. This field is required.

Spread Frequency. The spread frequency is how the annual invoiced amount is spread over the year. It cannot be updated after one rent increase invoice has been exported. This field is required.

Index Finder Months. This is the number that will be added to the Date Assessed to find the Index Finder Date for each period. The number can be any whole integer. ( positive, negative or zero). This field is required and defaults to -2.

Initial Basis. The Basis rent to be used in calculations of the first period. System picks up all the payments or billings of type base rent for the period duration, and puts the sum in this field. Although you can update this field, once the basis amounts in the basis periods have been calculated, updating the initial basis in the Agreements tabbed region would not change the basis amounts in the periods dynamically. To recalculate, you would first have to Undo periods or delete the individual basis amounts.

The basis is automatically calculated as the annual amount of what the increase is on. Optionally, check the Retain initial basis for calculation check box if you do not want to override the initial basis when the rent increase is recalculated. If the check box is checked, and the initial basis field is not null, the initial basis is not overridden. If the check box is selected and the initial basis is null, the null initial basis is overridden and replaced with a new calculated value.

If the increase is on base rent, then the sum of all lease payments or billings of type Base Rent for the duration of the year are defaulted into the Base Rent field. Individual payment/billing terms are displayed in the non-validated LOV. The calculations are defaulted, but the you can update the values. Also, if the Gross check box is checked, the basis amount is the sum of all the payment/billing terms defined in the main lease for the basis period. This field is required with rent increases.

Rounding Flag check box. The rounding flag check box field controls whether or not the payment term amount (annualized constrained rent increase amount/spread frequency) is rounded. More rounding options can be added at the main lease level and are effective at the line item level before the payment/billing is exported.

Aggregation check box. Select this check box to create rent increase terms based on the terms in the main lease (that are the basis for the rent increase) and to create multiple rent increase terms. Oracle Property Manager allocates the net rent increase assessed for a period to each rent increase term in proportion to the amounts in the main lease terms. For details, see Allocating Rent Increase.

Basis Periods Tabbed Region

Number. The number of the periods, distinguished by assessment dates. The field is system-generated.

Date Assessed. The date the rent increase is assessed. It is not updatable if there are any approved payment/billing term for that period. The field is system-generated.

Start Date. This value is system generated, but can be updated. The basis start date is 366 days prior to the Assess Date.

End Date. The Basis End date is the day prior to the Assessed Date. This field is system-generated.

Index Finder Date. The index finder date is the sum of the values of the Date Assessed plus the Index Finder Months. This value is defaulted into the Index Finder Date field for each period. The index finder date is the date associated with the index and is the date used to select the current index value. You can update the Index Finder Date field.

Actual Index Date. The actual index date represents the index finder date used to calculate the previous index. This field is especially useful in determining the index finder date for the previous index when the Default Most Recent option is selected in the Index Finder Method field.

Annualized Basis. The value of this system calculated field dependents on the following scenarios:

The basis is calculated as all pertinent schedule items between the Basis Start and End dates. However, Oracle Property Manager ignores all terms that have a frequency of One Time (including terms for back-billed rent increases) when calculating or recalculating the annualized basis. You can update the value calculated by Oracle Property Manager if required.

Relationship. The possible values for this field include; Greater Of, Lesser Of, Fixed Rate Only, and Index Only.

This field is required.

Index Change %. Index Change % is system calculated based on the change in the index over a specific period. Oracle Property Manager applies the index multiplier to the index change percentage to arrive at the adjusted index change percentage.

If the rent increase is based on the Base Year, then the % Change formula is (Current Index-Base Year Index)/Base Year Index.

If the rent increase reference period is Previous Year, then the % Change formula is (Current Index-Previous Year)/Previous Year.

The field is required only if the relation is Index Only, Greater Of and Lessor Of.

Basis Change %. The user-entered % of basis change to be compared with the index % change. If rent increases are fixed, then this field is required and user entered. If there is a comparative, such as the greater of or the lesser of, then this field is required.

Unconstrained Rent Due. The calculated annualized rent increase amount.

Constrained Rent Due. The constraints from Constraints window are applied to the unconstrained rent increase. Constraints from Negative Rent in the Agreement tabbed region are also applied.

Constraints Tabbed Region

Increase Over Constraint. You can define the treatment of the amounts that exceed the rent increase maximum constraints. The available options include the following:

Scope. The scope poplist consists of two values: Rent Due or Period to Period Increase.

Minimum Amount. The Minimum Amount constraint is mutually exclusive with the Minimum Percentage constraint.

Maximum Amount. The Maximum Amount constraint is mutually exclusive with the Maximum Percentage constraint and must be equal to or greater than the Minimum Amount.

Minimum Percentage. The Minimum Percentage increase constraint is mutually exclusive with the Minimum Amount constraint.

Maximum Percentage. The Maximum Percentage constraint is mutually exclusive with the Maximum Amount constraint and must be equal to or greater than the Minimum Percentage.

Related Topics

Assigning Office Space to Employees and Cost Centers

Assigning Office Space to Customers

Modifying Employee Office Space Assignments

Managing Properties