If you have not already, you will likely receive an operating and tax expense pass-through invoice soon from your landlord. This could increase your occupancy cost, but that is not to say that you should just pay the invoice without actually checking its veracity.
There are eight things that you should be aware of to look for to make sure that you are not overpaying for these operating expenses. If you are a client or prospective client and would like an expert second opinion, send the invoice you receive to us. We’ll check it and compare it to the provisions of your lease, helping to find any excess charges or looming increase, all at no cost to you.
- Check the base year for accuracy and proper credit for any updates to the base year
- Double check the size of the building, to make sure a larger area isn’t being listed. Also, be sure that the size used only includes the square footage that is being used for office space.
- Make sure the percentage of the building that is being leased is correct, and see if there is a decrease to the square footage which can lead to an applicable reduction for you.
- If you have made any estimated payments, ensure that they are being properly credited to your account.
- The operating expenses should be reasonable as compared to the competitive market.
- If you have a cap on expenses that you have negotiated in the lease, be sure that you are not being charged anything more than that cap.
- The real estate taxes should also be in line with the competitive marketplace. If you find these to be too low, then we can help protect your company against an increase that is likely to be coming.
- If your building has been sold, then you need to assess the impact this may have. The selling could spur a reassessment, which can result in higher real estate taxes. In the event that this happens, contact us to help you protect your company against these real estate pass-throughs, which can get very expensive.
Synergy Real Estate Group Corporate Advisory offers a complementary lease assessment, which helps figure out if you are paying too much in operating pass-throughs and tax expenses.
Contact us today for a free lease review. We can be reached by telephone at 888-979-7787, or email us at email@example.com.