Lease Audit Services
Hidden billing errors can cost tenants a significant amount of money each year. Studies indicate that more than 90% of landlords make mistakes when calculating Common Area Maintenance (CAM). Many tenant expenses are heavily negotiated, yet most landlords do not have sufficient staff or time to reflect those variations when preparing year-end statements. Instead, landlords opt for a generic billing formula and rely on the tenant to catch and report errors. Many tenants, however, are not aware of these overages.
Our expertise in performing desktop audits reveal landlord billing errors and can result in significant savings. CASE Commercial Lease Administration Services ensures that amounts billed to tenants are accurate and in accordance with their lease by performing routine desktop audits. Since pass-throughs represent a significant portion of a tenant’s total occupancy costs, CASE prevents costly billing errors by examining year-end reconciliations before payments are issued to the landlord. Our process identifies amounts that might inadvertently be paid in excess of what is contractually due; initiates changes in the landlord’s methodology for billing these overages; and/or facilitates modifications to the tenant’s lease to prevent future overcharges.
If you do not have staffing or talent to perform desktop audits consider outsourcing this specialized function. The return on investment can be substantial, ranging from 2% - 5% of occupancy costs. One of our large retail clients recovered in excess of $40 million over a 10-year period.
Let CASE perform the following tasks to uncover potential overbillings for your company:
- Review tenant reconciliations for mathematical errors, lease exclusions, incorrect pro-rata share, and caps
- Review supporting documentation such as invoices, tax bills, etc. on file
- Identify any additional documentation needed and request such information from the landlord
- Review payment histories to ensure escrows were properly applied by landlords
- Identify unusual increases
- Identify reconciliation discrepancies
- Identify pass-through reconciliations due, but not yet received from landlords (if costs have not been reconciled, oftentimes a credit is due to the tenant)
- Communicate discrepancies with the landlord and obtain recovery of funds or satisfactory explanation with support documentation, such as copies of invoices, tax bills, etc., for the CAM charges in question
- Create pass-through statistics from the billing data to establish a history of charges for each location
- Track and report savings
To learn more about CASE’s desktop audits program or to schedule a demonstration, contact Karen Loss at 972.759.7861 or John Rischard at 972.759.7857
