Rent Adjustment
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Table of Contents Rent Adjustment... 6 Customizing... 7 Customizing for Rent Adjustment... 8 Customizing for Calculation of Rent-Adjustment Average... 9 Maintaining Master Data for Rental Objects... 10 Business Transactions... 13 Maintaining Contracts for Rent Adjustment... 14 Calculation of Rent Adjustment... 15 Reports... 16 Calculation of Rent-Adjustment Average... 17 (C) SAP AG 5
Rent Adjustment In the Netherlands, companies leasing out their rental objects annually calculate the rent adjustment with the adjustment method: representative list of rents [External]. The rate of rent adjustment depends on the evaluation of your rental objects on the basis of the predefined fixture/fitting characteristics. Rental objects are measured with a number of points. The two characteristics determine the calculation for each rental object. The percentage or amount of rent adjustment depends on the total number of points for the calculation of which you need to define the factor of the fixture/fitting characteristic. Companies are required to calculate the average of rent adjustment for all their contracts to monitor the amount of the overall rent adjustment and to keep the average below the maximum limit as defined by law by manually correcting the amount or the percentage of the individual rent adjustments. According to legal regulations, extra points can be added in case a rental object is located in a highly-populated city. So that the system can add these extra points, you need to make settings in Customizing and in the master data. For more information, see the relevant sections (Customizing for Rent Adjustment [Page 8] and Maintaining Master Data for Rental Objects [Page 10]) in this document. Note that you can include the extra points by recalculating the total number of points of a rental object only when there is no valid contract for the given rental object (that is, for example, before you lease it out, or the contract is terminated). Process To process rent adjustment, you follow the steps below: 1. You make the required Customizing [Page 7] settings as outlined in the Customizing section of this document. 2. You create fixtures/fittings for your rental objects and maintain their master data as described in the Maintaining Master Data for Rental Objects [Page 10] section of this document. The system calculates the total number of points for each rental object per fixture/fitting characteristic, which is the measurement unit of the rent adjustment calculation. 3. You maintain the rent adjustment conditions and assign the Representative List of Rents adjustment rule to them. 4. You calculate the rent adjustment for your contracts by generating adjustment runs with the Specify Adjustments program. 5. You calculate the rent-adjustment average with the Calculate Average of Rent Adjustment [Page 17] report, which reads the results of the adjustment runs for your contracts and calculates the average. If it exceeds the limit defined by law, you can manually modify the amount or the percentage of the adjustment of adjustment runs individually. (C) SAP AG 6
Customizing Country Version Netherlands comes with a rent adjustment and an average of rent adjustment calculation procedure for which you are required to make the Customizing settings as described in: Customizing for Rent Adjustment [Page 8] Customizing for Calculation of Rent-Adjustment Average [Page 9] (C) SAP AG 7
Customizing for Rent Adjustment So that the system can calculate the rent adjustment for your contracts, you must make the following system settings: In Customizing for SAP NetWeaver under General Settings Check Units of Measurement Create a new unit of measurement with Points in the dimension area. Enter an internal unit of measurement format, and enter the same name for the commercial and technical external units in the Display group box. In the Application Parameters group box, select the Commercial Meas. Unit checkbox. In Customizing for Flexible Real Estate Management (RE-FX): o Master Data Basic Settings Measurements Define Measurement Types Define the unit of measurement with the Area Measurement as its measurement type, enter the default unit you have created in the previous step, and allow it for rental objects and contracts. o Adjustment of Conditions Representative List of Rents Define Representative List of Rents o Adjustment of Conditions Representative List of Rents Specify Basic Values for Representative List of Rents o Country-Specific Settings Netherlands Rent Adjustment Define Fixtures and Fittings Characteristics o Country-Specific Settings Netherlands Rent Adjustment Define Special Rounding Rules for Categories If your rental object is located in a highly-populated city, extra points can be included in the calculation of the total number of points. To do so, make the following system settings in Customizing for Flexible Real Estate Management (RE-FX) under Country-Specific Settings Netherlands Rent Adjustment Settings for Highly-Populated Cities: Customizing for Including Extra Points in Total No. of Points Calculation This Customizing document summarizes the steps that you need to make in Customizing. Enter Highly-Populated Cities Assign Measurement Type and Characteristic to Company Code Define Value Ranges for Extra Points For more information about the Customizing settings, see the Customizing documentation in the system. (C) SAP AG 8
Customizing for Calculation of Rent-Adjustment Average To be able to calculate the rent-adjustment average, you need to define the maximum of the rent-adjustment average defined by law in Customizing for Flexible Real Estate Management (RE-FX) under Adjustment of Conditions Adjustment Rules Cross-Method Define Adjustment Parameters (Capping Provisions) Dependent on Term. (C) SAP AG 9
Maintaining Master Data for Rental Objects So that the system can calculate the rent adjustment for each of your rental objects, you must maintain settings in the rental object master data. Prerequisites You have made the settings as described in Customizing for Rent Adjustment [Page 8]. Procedure 1. On the SAP Easy Access screen, choose Flexible Real Estate Management Master Data Process Rental Object. 2. On the Additional Data tab page, in the Representative List of Rents Figure group box, enter the representative list of rents you defined for the calculation of rent adjustment in Customizing. 3. On the Measurements tab page, enter the measurement type that records the value of the rental object. Enter the value of the rental object in the Size field and the measurement unit (EUR) in the Unit field. When you save the rental object, the system calculates the value of the rental object for each validity range per square meter as follows: o Calculates the total area using the data of the fixtures and fittings characteristics you selected as described in Customizing o Divides the value of the rental object by the total area The system first defines validity ranges for the Points measurement using the validity periods of the fixtures and fittings characteristics (see Example below) and then calculates and enters the following data for each validity range: o On the Measurements tab page, the system enters a row with the calculated total number of points for each validity range. o On the Measurements tab page, the system enters a row with the calculated value of the rental object per square meter for each validity range. o On the Fixtures/Fittings tab page, the system enters a row with the extra points for each validity range. You cannot generate a change for the future, for example for fixtures and fittings characteristics whose start date is a future calendar date. For an example on the system calculates the validity ranges for fixtures and fittings characteristics, see section Example. Example You assign the fixtures and fittings characteristics whose recorded data you want to include in the total area calculation to the rental object in the master data. In this example, the calculated total area is 100 m2. You enter the value of the rental object in the master data as follows: (C) SAP AG 10
Value in 2010: EUR 285,000 Value as of 2011: EUR 300,000 The system calculates the value of the rental object per square meter and the number of extra points on the basis of the two above mentioned data as follows: Validity Period Value of Rental Object in M2 Number of Extra Points** 2010 EUR 2850 15 As of 2011 without an end date* EUR 3000 25 * The system does not generate data for a date in the future (for example, for 2013), because any of the data can change in the future that might modify the values you would calculate now. **According to legal regulations, if the value of the rental object per square meter is equal to or lower than EUR 2900, the maximum number of extra points is 15. If the value of the rental object per square meter exceeds EUR 2900, the maximum number of extra points is 25. 4. On the Fixtures/Fittings tab page, select the relevant maintenance structure so that the system can display the fixtures and fittings characteristics. You can create fixtures and fittings from the Dutch characteristics hierarchy. When you save the rental object, the system automatically enters the characteristic with the extra points for each validity range in the table. If you want to reduce the maximum number of extra points, you can enter the characteristic you defined for the delta value in Customizing in the table and enter the delta value with a minus sign in the Number of Points Calculated Values field on the Enhancements subscreen. 5. On the Fixtures/Fittings Details subscreen, you can check the values and change the number of points if it needs to be different from the value defined in Customizing. Do not enter any data in the Cat. Point Total field. 6. On the Enhancements subscreen, select the Number of Points (Netherlands), and enter data as follows: o In the Number of Fixtures/Fittings for Characteristic field, enter the number of all the fixtures/fittings with the same fixture/fitting characteristic in the rental object. You can enter decimal numbers if the rental object is an area. o In the Number of Rental Objects field, enter the number of rental objects that commonly use the same fixtures/fittings of the same characteristic. The system displays the calculated and its rounded value as the factor of fixtures/fittings, which is the fraction of these two numbers. 7. The system divides the number of fixtures and fittings characteristic by the number of rental objects to get the factor. 8. The system then adds the rounded value of the total number of points of each fixtures and fittings characteristic one by one. After that, the system rounds the final value and multiplies it by the number of points to get the total number of points of the rental object. (C) SAP AG 11
9. Make the same determination of the factor and the total number of points for each characteristic. You can include the extra points by recalculating the total number of points of a rental object only when there is no valid contract for the given rental object (that is, for example, before you lease it out, or the contract is terminated). If you modify a value in the rental object, or you modify a valid contract, the system automatically recalculates the total number of points for the modified rental object, or the nonstatistical rental objects of the modified contract. If you selected some characteristics categories for a special rounding in Customizing, the system calculates the total number of points of a rental object in a different way: 1. The system first calculates the total number of points of the selected categories as follows: o Adds the factors of all the fixtures and fittings characteristics that belong to the given category and rounds the final value o Multiplies the rounded value by the number of points of the category o Rounds the final value 2. If there are additional fixtures and fittings characteristics that belong to other categories, the system adds their rounded values (that is, the rounded value of the total number of points) one by one to the rounded value of the selected categories. 3. The system finally calculates the total number of points of the rental object by rounding the final value. The total number of points is used for the adjustment runs and this number must be within the adjustment range you defined in Customizing. You can check the total number of points rounded to an integer of the rental object on the Measurements tab page. (C) SAP AG 12
Business Transactions Country Version Netherlands comes with the following features for rent adjustments: Maintaining Contracts for Rent Adjustment [Page 14] Calculation of Rent Adjustment [Page 15] (C) SAP AG 13
Maintaining Contracts for Rent Adjustment So that the system can calculate the rent adjustment per contract, you must create real estate contracts of type Residential Lease Out, and assign all your rental objects to them. Prerequisites You have completed the following activities: You have made the settings as described in Customizing for Rent Adjustment [Page 8] You have maintained master data as described in Procedure Maintaining Master Data for Rental Objects [Page 10] 1. To access the program, on the SAP Easy Access screen, choose Accounting Flexible Real Estate Management Contract Process Contract. 2. Enter your Dutch company code. The system generates a contract number. 3. Choose Enter. 4. On the Objects tab page, assign all the rental objects that have the correct number of points as measurements. 5. On the Conditions tab page, create a basic rent condition and define the calculation object Rental Object for it on the Conditions subscreen. If it is necessary, you can additionally create conditions, such as advance payment. 6. On the Adjustment tab page, create a Representative List of Rents adjustment rule and assign the basic rent condition to the adjustment rule on the Conditions subscreen. You can start the simulation or the update adjustment run from the contract. (C) SAP AG 14
Calculation of Rent Adjustment So that the system can calculate the rent-adjustment average with the Calculate Average of Rent Adjustment program as described in Calculation of Rent-Adjustment Average [Page 17], you must first calculate the rent adjustments by generation adjustment runs for each contract as described below. Prerequisites You have made the following settings: You have made the settings as described in Customizing for Rent Adjustment [Page 8] You have maintained master data as described in Maintaining Master Data for Rental Objects [Page 10] You have maintained contracts as described in Maintaining Contracts for Rent Adjustment [Page 14] Activities Run the Specify Adjustment report. To access the report, on the SAP Easy Access screen, choose Accounting Flexible Real Estate Management Adjustment of Conditions Adjustment Specify Adjustments. Make settings as follows: In the Adjustment group box, select the Simulate Adjustment Run adjustment method On the Procedure subscreen, select the Representative List of Rents and select Standard as the adjustment reason Choose Execute If the calculation is correct, you can change the adjustment method setting to Perform Adjustment Run and execute the report in active mode again. For more information about the report, see Specifying and Editing Adjustments [External]. (C) SAP AG 15
Reports Country Version Netherlands comes with a report in Flexible Real Estate Management (RE- FX) that you can use to calculate the average of rent adjustment according to adjustment runs. The report enables you to manually update the amount or percentage of rent adjustment if it exceeds the adjustment limit as defined by law. (C) SAP AG 16
Calculation of Rent-Adjustment Average Social housing companies are required to calculate the average of all the rent adjustments of their lease-out contracts, which cannot exceed the limit defined by law. This report enables you to calculate the rent adjustment average and to manually modify the amount or the percentage of the included rent adjustments. To access the report, on the SAP Easy Access screen, choose Accounting Flexible Real Estate Management Country Specifics Netherlands Calculate Average of Rent Adjustment. Prerequisites You have made the following settings: You have made the settings as described in Customizing for Calculation of Rent- Adjustment Average [Page 9] You have executed adjustment runs as described in Calculation of Rent Adjustment [Page 15] Features Selection In the General Selection group box, enter the identification of one or more adjustment runs the system generated by executing the Specify Adjustments program. If you also want the system to calculate the subsidizable rent, select the Calculate Subsidizable Rent checkbox. There can be performance issues due to the large amount of data, especially if you enter multiple adjustment run identifications at the same time. You can run the report in batch mode by selecting Program Execute in background and check its results in System Own Objects. Output The report generates an ALV list that contains all the adjustment runs per contract. It displays the previous rent, the adjusted rent, and the adjustment percentage. At the top of the screen, the report generates a summary table that groups the results according to adjustment identifications and in a separate row, it additionally summarizes the results of adjustment runs. If you select a row and choose Manual Adjustment, or double-click the row, you can manually overwrite the adjusted amount or the adjustment percentage of the adjustment run. After that, the system recalculates the rent adjustment and the adjustment percentage in the summary table, and marks the changed contract with an X in the Status column. If you have more than one run for a contract, the duplicated runs appear on a separate screen log with the corresponding error log. (C) SAP AG 17