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Recover Money Using a Tenant Lease Review

August 13, 2011 | Comments: 0 | Views: 155

Because a lease agreement allows for multiple miscalculations and mistakes in billing, your internal effort in reviewing complex contracts for large amounts of leased space will benefit from outside expert audit.

When leased space exceeds 100,000 ft. you should generally expect your recoveries from an external tenant lease review to be at least.1% of your total occupancy costs from the preceding four years. This is true for commercial, industrial, and office users.

The review goes deeper than the lease abstract and drills down into granular detail to uncover unseen inconsistencies between what your lease agreement obliges you to pay and the amounts you were billed and paid. Errors occur in a variety of component costs here's a distribution of errors by occurrence.

Common Area Maintenance 22%

Real Estate Tax 26%

Rent 32%

Repair and Maintenance 8%

Subtenant Billings 6%

Tenant Improvements 2%

Statement Credits 3%

Of the countless ways landlords have overcharged tenants, here are a few...

Repairs done to other units.Administration fees charged on management fees.CAM charges not directly related to the common area.Upgrade/capital improvements misclassified as maintenance.Expenses applied in a single year instead of amortized.Calculating CAM with denominator set at gross leased space instead of gross leasable.

Once the overcharges are detected, a good tenant lease review next requires clear and courteous correspondence with your landlord. See the censored example below

Dear ____________,

We are currently reviewing our occupancy cost disbursements and we have determined that, regarding our ______________ location, for the years 2008, 2009 and 2010 combined, we have incurred $64,937 in charges for which we are not liable pursuant to the terms of our Lease.

Section 4.3 of our lease states that our operating expense obligation is limited to our prorata share of CAM costs in excess of the "Allowance." Section 4.3 of our Lease states that the "Allowance" is our actual 2008 Operating Expenses.

However, for each of the years 2008, 2009 and 2010 you charged us for our prorata share of all Operating Expenses causing us to incur $64,937 in excess costs as follows.

(Confidential Client information censored)

Please review the contents of this letter and send a check or credit for $64,937 to my attention.

The most sophisticated real estate departments leverage outside audits to maximize their internal audit capabilities. DCI Solutions can partner with your internal audit to ensure you only pay what your original lease requires you to pay.

DCI guarantees no-risk 3% to 10% earnings increases for midmarket companies through tax and sg&a refunds and optimization. Our clients succeed because they welcome the unique perspective our team of experts provide and the unobtrusive process for making the client happier and wealthier. Please contact DCI Solutions ( if you wish to learn how their external audits can generate large savings in the least obtrusive, most time-efficient manner.

Source: EzineArticles
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Article Tags:

Tenant Lease Review


Audit Landlord Charges


Cam Audit


Occupancy Cost Review




Cost Savings

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