Lease Audit

CTMI’s Lease Audit Service is a thorough review of your lease cost, comprised of building operating expenses, taxes & utilities charged by your landlord.

The cost of leasing space for a corporate office is comprised of two components – the base rent and the proportionate share of operating expenses (including property taxes) for an office. Base rent usually is stated as a fixed amount in a lease agreement.

Operating expenses (common area maintenance, or CAM) also are defined in lease documents, but can vary from year to year due to changes in utility expenses, vacancy, service contracts, capital expenditures, property management and ownership.

Leases contain specific exclusions to certain operating expenses that should not be passed through by the landlord. A lease audit should be conducted to verify whether expenses have been assessed accurately, based on negotiated lease provisions.

The lease agreement will outline the process for conducting a lease audit and the specific windows during which to notify the landlord and conduct the audit. The clock starts when the tenant has received a reconciliation statement for actual expenses versus the accrued operating budget from the prior year. This usually occurs around March or April each year.

Our review goes beyond the annual expense statements provided to you. We include a detailed analysis of the landlord’s general ledger, documents and records to verify you are being charged no more than your negotiated share.