Frequently Asked Questions
What is a lease audit?
A lease audit is an in-depth review of a tenant's occupancy costs
to ensure that those costs are in compliance with the lease requirements.
Why audit my leases?
discovered significant errors in occupancy charges in over 50% of the leases we have
audited. Most of these errors are inadvertent and are caused by misinterpretation of lease
language or incorrect calculations.
What are some Red Flags
- Changes In The Management Company
- Accounting Changes In Billings From The Landlord
- Move-In Activity and Tenant Fit-Up
- Marketing, Promotional Events around The Building
- Increases In Costs Greater Than 2-4 Percent From The Previous Year
If one or more of these "Red
Flags" has occurred at your building or leased premises, you should have your
lease and reconciliations audited for potential overcharges.
What information do we have to provide to get started?
Information required includes leases, amendments, modifications,
as well as any pertinent correspondence from the landlord. We would also
require copies of
annual statements, reconciliations, and assessments.
Why use a Lease Auditing firm instead of an Accounting firm?
Our staff accountants and experts go beyond the normal accounting
review process. We evaluate the total transaction from the viewpoint of the negotiating
parties and their original intent. Our auditors have the real estate knowledge not
generally found in accounting firms.
How do we maintain our Landlord/Tenant relationship?
pride in our ability to handle claims while maintaining an excellent landlord/tenant
relationship. We accomplish this by ensuring that claims are valid and well documented,
and only communicate with the landlord with our Clients' prior knowledge and approval.
What are the benefits?
Benefits are twofold: first, past errors in billing are
identified and the overcharges are recovered; and second, procedures and corrections are
implemented so that errors do not recur during the remaining term of the lease.
How does CRS gather the preliminary review information for a large portfolio?
work with the Client to identify potential audit candidates; and based on our experience
and the Client's specific requests, we will identify those locations that should provide
the greatest economic benefit. Typically in a large portfolio of lease locations (over
250), about 20% of that number account for over 80% of total occupancy costs. Once the
audit candidates are identified and prioritized, CRS
will go to the repository of the lease and billing information and perform the preliminary
review and catalog any missing information. CRS
will formulate an effective strategy to gather the missing information that will least
disrupt the Client's day to day activities.
What size space do I need to make it worthwhile?
We don't always look at space size. If you feel you are paying
more than you should be, CRS will
work with you to create a program that makes sense.
How long does a lease audit take?
After the required documents are compiled, the preliminary review
can be completed in a short period of time, usually a week or less, depending on the
complexity of the documentation. Final resolution depends on many
clear-cut issues usually result in a quick resolution, while complex issues can take as
long as several years to be resolved.
What should I look for in a lease audit firm?
The right audit firm must have experienced real estate
professionals with a proven track record of performance and results along with the ability
to accurately and consistently communicate those results to the Client.
CRS represent Landlords?
not represent landlords, thereby avoiding any possible conflicts of interest. We focus
solely on assisting commercial tenants with their occupancy cost control efforts.
What about confidentiality?
Confidentiality and integrity are our top priorities. As an
extension of our Clients' real estate operations, CRS
takes our role seriously and have developed strong working relationships with our
Clients through years of service.
What geographical areas does your company cover?
performed lease audits in virtually every state, including Hawaii and Canada. We can also
provide services for international locations, if desired.
What is the cost?
normally provides lease audit services on a contingency basis. Our fee is a percentage of
the savings realized by the Client and is payable only when the Client has actually
received or benefited from those savings.