This document discusses commercial lease audits, which involve systematically examining lease documents to check compliance with terms and measure space usage. Lease audits are important because real estate costs are major operating expenses, and landlords may overcharge tenants who lack expertise to review complex lease agreements. Audits ensure charges are accurate and identify common errors like miscalculated expenses or duplication of fees. The audit process involves verifying lease details, permitted space usage, expense charges, additional fees, and inspecting the premises. Tips for effective audits include considering economic impacts, knowing market prices, and mitigating risks by choosing a cost-effective audit provider.

1. Commercial Lease Audit

2. What is commercial lease audit?
 Systematic process to examine lease
documents
 Includes interpretation of lease terms and
measurement of space
 Checks for compliance with lease terms

3. Why is lease audit necessary?
 Cost of real estate – a major operating cost
 Commercial landlords assume that tenants
never check expenses
 Millions of dollars are overpaid year on year
 Entrepreneurs lack expertise to review lease
agreements
 Heavy documentation with complex terms
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4. Advantages
 Commercial lease audit ensures detailed analysis of
charges made
 Aids in cost reduction
 Ensures no hidden/additional charges
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5. Common errors of expenses
 Proportionate share miscalculation
 Duplication of charges
 Tax refunds not credited
 Overcharging for premises
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6. Commercial lease audit – How is it done?
Usually done by an attorney or service providers with an
expert team - here is how it is done:
 Check for basic lease terms/letter of intent
 Confirm with dates, names of parties involved, rent,
security deposit, parking and other rights
 Renewal, expansion or termination clauses need to be
looked into
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7. Commercial lease audit – How is it done?
 Permitted usage of space for future purpose
 Need of space for parking, vaults, freight elevators
and other common area space
 Charges for operations, taxes, insurance, CAM
 Additional charges for parking or excess CAM charges
 Analysis of past charges to avoid overcharging
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8. Commercial lease audit – How is it done?
 Inspection of site prior to moving in
 Termination rights based on casualty loss,
condemnation or foreclosure
 Commencement date
 Understand and read the lease before signing
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9. Tips for effective commercial lease audit
 Economic consequences to the tenant need to be
considered
 Knowledge of the market prices and the tenant's
position makes for a better negotiation
 Inconsistencies – commencement of lease,
indemnify provision, operating expenses,
alterations and repairs clause, have to be looked into
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10. Tips for effective commercial lease audit
 Mitigate risks by assigning it to the least cost provider
 Consider short and long term issues
 Be reasonable and choose carefully
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Springbord is a cost-effective option for any real estate company looking for
quality lease audit services.
Know more: https://www.springbord.com/services-leaseabstraction

12. Thank You