Set Up Rent and Escalations

You record rent on the lease's Rent page. Each rent payment is a rent obligation with its own amount, dates, payee, and payment frequency, and each obligation carries its own escalations: a fixed percentage, a flat amount, a step schedule, or an increase tied to a published index such as US CPI, the German VPI and HVPI, the French INSEE indices (ICC, ILAT, ILC, IRL), or a custom index. Percentage rent has its own separate section on the Rent page.

You can enter rent on any lease you can edit: a draft you are building (see Create a lease) or a published lease you have opened for a correction or amendment (see Correct or Amend a Lease). The Rent page cannot be opened while AI is still reading a lease document into the draft, and the form is disabled while you hold no editing session and the concurrent editor sessions are full.

Record a rent obligation

The Add Rent Obligation wizard walks through four steps: Type & Frequency, Payment Details, Adjustments, and Payment Schedule. A rent entry requires a payment amount, start and end dates, and a payment frequency.

1. Open the lease and choose Rent on the lease record.

2. Turn on Does the lease contain any rent obligations? if it is not already on. The Rent Obligations list appears.

3. Click Add Rent Obligation.

4. In the Type & Frequency step, choose the rent type and the Payment Frequency.

5. In Payment Details, enter the Payment Amount. The currency picker sits inside the money input, so a lease in another currency is billed in that currency.

6. Enter the Obligation Start Date and the Obligation End Date.

7. Choose the Payee, one of the lease's parties (see Set the Parties for how parties are recorded). To split the rent across parties, turn on Multiple Payees and add a row for each party: each row has a Party and a Share, and Share Format offers Percent (%) or Fraction (a fraction is entered as a numerator and a denominator).

The wizard's Adjustments step comes next; see the sections below when the rent escalates. You finish the obligation on the Payment Schedule step.

Add an escalation

Escalations are configured per rent obligation in the wizard's Adjustments step. Turn on Does the rent adjust over time?, click Add Adjustment, and choose an Adjustment Method: Flat, Percent, Index, or Custom for a step schedule. Leave the toggle off for rent that never changes.

Flat or percentage increase

For a fixed increase on every adjustment date:

1. Choose Flat and enter the Flat Adjustment Amount.

2. Or choose Percent and enter the Percentage Adjustment Amount. Rounding controls appear alongside the amount.

Step schedule

A Custom adjustment is a schedule of rent steps: each step sets a new amount that takes effect on a date you choose or at a numbered payment.

1. Choose Custom and click Configure Adjustment Schedule.

2. Click Add Adjustment Step.

3. For When Does This Amount Take Effect?, choose A Date and enter the Escalation Date, or choose A Payment Number and enter the Payment Number.

4. Enter the New Amount.

5. Repeat for each step, then click Save schedule. The adjustment form shows how many steps you have configured.

Index-linked escalation

An Index adjustment raises the rent by an amount tied to a published index. The required settings are the index, the comparison method, proration, catch-up handling, and when the adjustment applies.

1. Choose Index as the Adjustment Method and pick the Index from the searchable picker.

2. Choose the Calculation Method: Year Over Year compares the index to the prior year, and Year Over Base Year compares it to a base period. Year Over Base Year shows a required Base Period selector.

3. Set Index Lookback if the reading should come from before the adjustment period. It takes a whole number of months from 0 to 24, starts at 0, and 0 reads the period the adjustment falls in.

4. Choose the Proration Method. The options follow the obligation's payment frequency:

   Payment frequency	Proration Method options
   Monthly	Actual Days in Month, 30 Day Month, 365 Day Year
   Quarterly	Actual Days in Quarter, 365 Day Year
   Semiannually	Actual Days in Half, 365 Day Year
   Annually	Actual Days in Year

5. Choose Catch-up Handling: None, Immediate, or Next Payment. Next Payment is the default. See Catch-up when an index value arrives late below for what each choice does.

6. Set when the adjustment applies. A one-time adjustment takes an Adjustment Date. A recurring adjustment takes Starting (the date of first adjustment) and an optional Through date. These dates are anchored to the obligation's Obligation Start or Obligation End.

Floors, ceilings, premiums, and rounding

In Additional Adjustment Criteria, select any of the following and the matching section appears on the form:

• Minimum Adjustment (Floor): Floor Type is No Decrease, which floors the adjustment at zero, or Specified. Specified shows a Floor Method of Amount, Percent, Lesser of Two, or Greater of Two, with Floor Amount and/or Floor Percentage as the method requires.

• Maximum Adjustment (Ceiling): a Ceiling Method of Amount, Percent, Lesser of Two, or Greater of Two, with Ceiling Amount and/or Ceiling Percentage as the method requires.

• Premium: adds Premium Amount and Premium Percentage to the adjustment.

In the Rounding section, Rounding Method is True (the nearest value), Up, Down, or None (the exact value). Rounding Decimals, from 0 to 10, appears for any method other than None.

How an adjustment is applied and reviewed

Every adjustment carries a status: Awaiting Index, Calculated, Approved, or Rejected. An automation can hold an adjustment for review before it applies, and adjustment statuses are reported in the Escalation Steps dataset when you build reports.

Catch-up when an index value arrives late

When an index value arrives late, payments that were already due bill at the previous rent, and a catch-up amount covers the difference. Catch-up Handling decides where that catch-up lands: Immediate dates it on the date the value became known, Next Payment dates it on the schedule's first payment on or after that date, and None suppresses the catch-up entirely.

What the rent schedule drives

The rent schedule produces the lease's payments and the critical dates around them, such as escalations and payment due dates; see Track critical dates and payments. Rent also flows into the lease's accounting once the lease is measured; see How lease accounting works. To change rent on a published lease, start a correction or amendment rather than editing in place.