Recoverable expense

This is often used for items that are truly shared, like the gas used to heat the building, or the electricity used to run the lighting and air conditioning.

In this case the landlord might agree to pay the first, say, $5,000 of the property taxes, and then charge anything above that back to the tenants.

Additionally, there may be a cap on payments that limits any period-to-period change, pushing back any overage to future periods, potentially forever.

Another complication involved in recoverable expense calculations occurs due to changes in occupancy.

In some cases this is reasonable; the tenants would not be expected to pay more property taxes if the landlord does not rent out all the units.