It’s no secret that the cost of running a business grows with consistency.
Business professionals across the country have seen costs rising at every stage of the chain of production. Raw materials, energy, labor and distribution are more expensive than ever before. The corporate pocketbook is being strained. In an economic environment where everyone is looking to reduce budgets and cut costs, there is one source of overpayment for commercial tenants that, when addressed with the help of Eximius BPO lease administration specialists, utilizing our lease audit checklist, can provide significant recovery of funds.
The culprit is misinterpretation of the lease for a retail or office space. Complicated language within a commercial lease makes the terms difficult to navigate and to understand. A tenant may be overpaying for rental fees including utilities, insurance, and common area maintenance. These overpayments could be multiplied over months and even years.
Eximius BPO has assisted to get a clear assessment of expense sheets by conducting a comprehensive lease audit as a way to spot holes in a lease and plug them up. A proper audit can identify billing discrepancies, get tenants back on the right rates, and in some cases, reimburse tenants for overpayment.
The main contributors to overpayment are tenants who don’t understand the terms of the lease, and landlords who apply a standard charging structure that assesses blanket rates instead of rates specific to each of tenant.
The Eximius BPO auditor starts by reviewing the tenant’s lease and identifying rates and fees as prescribed by the terms specified in the lease. This includes looking at critical cost including:
- Common area maintenance (CAM). This is the price you pay for using shared space, for example, what a fast-food franchise would pay for their location in a mall food court.
- Real estate taxes. These include property taxes.
- Insurance. This includes insurance on property damage.
- Utilities. Gas, electric, and water.
- Co-tenancy. This is the cost of sharing a space with more than one tenant.
- Marketing fund. This is usually tied to consumer price index and helps the shopping center’s marketing efforts.
A comprehensive lease audit is the best way to identify lease weaknesses, and will identify billing discrepancies, get tenants back on correct billing terms, and reimburse tenants for overpayment.