Why You Should Have Audit Rights in Your Commercial Lease
My client occupies several floors in a downtown office building. As a large multi-floor tenant, they successfully negotiated a lease that excluded all operating expenses related to the parking garage.
After they got the annual operating statement from the landlord, they took a close look at it and found that the landlord only excluded the valet parking costs.
They asked me to double-check the lease. A strict reading of the lease would have excluded all expenses related to the garage, so this also meant excluding such items as electricity, elevators, security, management fees, labor, insurance and taxes as well.
So, the client requested an audit.
After the audit and negotiations, we ended up with an adjustment that was worth more than 50 cents per square foot, per year to the tenant. For this multi-floor tenant, that saved tens of thousands of dollars every year.
Read your commercial lease very closely… Small savings can really add up.