What are the “pass-through” formulas ?
There are two basic formulas. One formula permits rent to be raised beyond 5% when the operations and maintenance expenses on the property have increased during the most recent twelve months, when compared to the preceding twelve months. The second formula permits a pass-through of a portion of the debt when the debt service on the property has increased in the most recent twelve months. For both formulas, the increase in operations or debt is pro-rated for the entire property. The specific factors included in the formulas, and a worksheet to calculate the formulas, are available from the Dispute Resolution Program.
