By auditing operating expenses and taxes detailed in your expense reconciliation statement, you can ensure that you’re charge just the right amount for your lease.
As a commercial real estate tenant of Tucson office space, industrial space or retail space, this is the time you will receive from your landlord your 2011 expense reconciliation statements of operating expenses and taxes.
This is the ideal time to see if your landlord is over-billing your company. You have 30 to 60 days after receiving the statement to give notice that you want an audit done. We at Commercial Real Estate Group of Tucson advise that you consider it.
An audit of your lease expenses may save you substantial amounts of money over your lease term. Examining the landlord’s expenses assures you that you are properly billed. We know of one auditor who has saved his clients millions of dollars over the last six years.
Not every tenant needs an annual audit. Here are some reasons when you should consider it.
New Gross Lease. If your gross lease was executed in 2011, you have one chance to audit the base-year expenses. If you waive this right, you may be over-billed for the rest of the lease if the landlord understated base-year expenses.
New Net Lease. If you signed a net lease in 2011, you may want to verify that you’re charged only permitted expenses.
Mixed-Use Properties. Landlords may allocate expenses to the various components in mixed-use properties that do not reflect the actual usage of services by each component.
Capital Projects. Major capital spent on building systems, exteriors or common areas should be audited to confirm if your lease permits such expenditures.
Operating Expense Increases. If operating expenses rise substantially, there’s a possibility the landlord improperly calculated them. You’ll want to look at specific line items of expense.
High Vacancy. A landlord whose property has high vacancy may make significant errors in applying the gross-up adjustment of expenses. This can result in you paying too much for your share of the annual operating expenses.
Commercial Real Estate Group of Tucson can help you determine if an audit is in your best interest and help you set the process in motion. Contact the Tucson tenant representation company for details.
Commercial Real Estate Group of Tucson specializes in representing tenants and corporate users across the United States, Latin America, Europe and Asia as a member of ITRA. For more information call 520-299-3400.