Base Year concessions allow you to set a baseline expense amount from a reference year and charge tenants only a percentage of expenses that exceed that baseline. This is common in commercial leases where tenants share operating costs but only pay their share of increases above the base year.
Unlike other concession types, Base Year concessions require both values to be configured: a Base Year Amount (the baseline from the reference year) and a Base Year Percentage (the tenant's contribution to expenses above that baseline).
How the Calculation Works
Re-Leased uses this formula:
Tenant Contribution = (Prorated Expenditure − Base Year Amount) × Base Year Percentage
If current expenses are at or below the base year amount, the tenant pays $0.
If current expenses exceed the base year amount, the tenant pays the specified percentage of the excess.
The system automatically prorates calculations based on the tenant's lease term days.
Tenant contribution is never negative — minimum is $0.
Example: Base Year Amount $10,000, Base Year Percentage 75%. Current prorated expenditure $15,000: ($15,000 − $10,000) × 75% = $3,750. If expenditure were $8,000: ($8,000 − $10,000) × 75% = −$1,500 → tenant pays $0.
Where to Configure Base Year Concessions
Base Year concessions can be applied at three levels:
Budget Level
A single concession applies to the entire budget for a lease. Use this for straightforward agreements where one base year amount and percentage covers all expenses.
Schedule Level
Concessions apply to individual schedules (e.g. CAM, Utilities, Maintenance). Each schedule can have its own independent base year amount and percentage. Use this when different expense categories have different base year terms.
Chart of Account (CoA) Level
The most granular option — concessions apply to specific chart of accounts. Use this for detailed lease agreements with specific base year terms per expense line item.
How to Set Up a Base Year Concession
Navigate to the Budget Concessions page for your budget.
Select the tenancy you want to configure.
Choose your level: Budget, Schedule, or Chart of Account.
Select Base Year from the concession type dropdown.
Enter the Base Year Amount (must be greater than 0) and Base Year Percentage (must be between 0 and 100).
Click Save.
Note: Both fields are required. You cannot save a Base Year concession with incomplete information. Once a budget is approved, concessions become read-only.
How Base Year Concessions Appear in Re-Leased
In Budget Concessions, the concession type displays as Base Year: $[Amount] ([Percentage]%) — for example, "Base Year: $10,000.00 (75.00%)".
During budget reconciliation, Re-Leased automatically prorates the expenditure to the tenant's actual lease term days, compares it against the base year amount, applies the percentage to any excess, and displays the final tenant contribution.
Common Use Cases
Office building operating expenses: Tenant pays 80% of operating expenses above the 2023 baseline — configure Base Year Amount as the 2023 total, Base Year Percentage as 80%.
Retail centre CAM charges: Tenant pays 100% of CAM increases above the 2022 baseline — configure Base Year Amount as 2022 CAM total, Base Year Percentage as 100%.
Multi-schedule base year: Different base year terms per schedule — configure each independently at the Schedule Level (e.g. CAM at $50,000/75%, Utilities at $20,000/100%, Maintenance at $15,000/50%).
Frequently Asked Questions
What if expenses are below the base year amount?
The tenant pays $0. Base Year concessions only charge tenants for expenses above the baseline.
Can I change a Base Year concession after saving?
Yes — in draft budgets only. Once a budget is approved, concessions become read-only.
Can I use Base Year at multiple levels simultaneously?
You select one concession method per lease. However, at Schedule or CoA level you can configure multiple independent Base Year concessions for different schedules or accounts.
How does proration work?
Re-Leased prorates expenses to the tenant's actual lease term days first, then applies the base year calculation to that prorated amount.
Budget terminology varies by region: Asia-Pacific customers refer to it as Budgeted Outgoings, European customers as Service Charge, and North American customers as Operating Expenses. For more information on regional terminology, see our Glossary of Regional Terminology.