Understanding Expense Participation Adjustments

When calculating expense participation, some tenants might be exempt from expense sharing. In this case, you can set up an adjustment to the expense participation calculation, amount of expenses × (tenant's area ÷ building or property area) = tenant's expense share, to revise the tenant's expense share amount. You can specify expense participation adjustments in either the E.P. Class Information program (P1530) or the E.P. Information program (P15012) at the account, class, or lease level.

To set up an adjustment, you can adjust any or all components of the expense participation calculation:

• The class exposure (amount of expenses).

• The numerator (tenant's area).

• The denominator (building or property area).

For example, a tenant, such as an anchor tenant in a shopping mall, may be exempt from expense sharing because their unit attracts shoppers who increase the sales for all mall tenants. In this case, you can set up an adjustment to exclude the area for their unit from the total area for the building or property.