FAQs

A lease audit is a comprehensive analysis of your lease agreements and related invoices (CAM, utilities, real estate taxes, insurance, sundry charges) to confirm your landlord’s charges comply with your lease and proper accounting. This often involves reviewing a landlord’s books and records to identify billing discrepancies and then resolve such issues to create past, current and/or ongoing savings.

Lease audit services are perfect for tenants with highly negotiated leases in mature corporate real estate markets (Central Business Districts or CBDs).

Common industry verticals include:

• Finance (commercial and investment banks, brokerage firms, private equity firms, fintech firms)
• Professional Services (law firms, accounting and consulting firms, engineering and architecture firms)
• Technology/information
• Advertising
• Media
• Insurance
• Telecom

A KBA lease review will provide immediate insight into your landlord’s financial compliance with your leases and the overall economic intent of your deals. Resolving issues can result in immediate cost recovery in the form of refunds and rent credits, as well as long-term savings in the form of cost reductions.

KBA’s OpEx clause drafting experts can identify lease language that creates ambiguity, increases overpayment risk and/or permits landlords to charge for items that you shouldn’t pay for. We help many major tenants and law firms draft and negotiate escalation clauses to provide sustainable clarity and protect occupiers against unjust passthrough treatment.

Ensuring your lease expenses are in line with your expectations is a critical step toward overall lease compliance and a good way to reduce long-term financial risk. Keeping a watchful eye over additional rent spend safeguards budgets and preserves the value of negotiated lease terms.

Sometimes overpayments in OpEx, CAM, sundry charges, real estate taxes and insurance will go undetected for years, but here are some easy-to-see events that should spur you into action:

• Building management or ownership changes
• Above average expense increases
• Base-year leases with gross-up provisions
• Recent major capital improvement projects
• Nuanced cap or allocation language in the lease

No. A CPA firm can be used when a formal inspection of books is needed, but it’s optional. Of utmost importance is finding a zealous, strategic advocate who can identify the full range of overpayment issues, avoid red herrings, artfully navigate the research process, and negotiate a creative, amicable resolution.

You didn’t retain a CPA to negotiate your lease, so you shouldn’t turn to one to help interpret your deal’s nuanced language or to represent you in the strategic positioning of complex claims.

Start no later than the second year of the lease and repeat annually. KBA’s unique approach has proven that early and regular reviews catch issues before they compound and will protect future budgets. Because many leases only allow tenants to review charges from the immediately preceding year, and each year presents a new overcharge opportunity, securing a partner to confidentially review your lease-related operating expenses on an annual basis is the best way to support cost control over your real estate portfolio.

Implementing a lease audit program is easy. Collect your lease(s), amendments, operating expense reconciliations, and sample rent bills. With these documents, KBA can assess overpayment risk at no charge and without landlord contact.

No. When following KBA’s methodology most projects should involve very little tenant resources and can be resolved without a negative impact on landlord relationships. Lease audits should never result in arbitration or litigation.

Pricing for lease audit services should be based on outcomes. A proper lease audit program should cost tenants nothing, both in actual expenses and in resource allocation. The best lease audit firms align with their tenant clients by sharing in the outcome of the work.

This is the only way to create a truly sustainable, long-term enhancement to overall lease management and cost control. At KBA, if there are no savings, there is no fee, period.

Not to worry. Lease audit restrictions have been around for decades and KBA offers compliant solutions for every type of constraint. Don’t be fooled — a limitation on your right to inspect a landlord’s books and records is not the same as a restriction on who you hire, or how you pay a lease audit advisor.

Call us to learn how to optimize the review process in the context of your specific lease language.

KBA combines the typical financial/accounting review with a legal/deal-focused analysis to ensure charges align with the lease’s economic intent—not just the literal language. Our broader approach uncovers issues other firms miss (even situations where the lease provides no guidance or supports the landlord’s billing), and amicably resolves them to produce 4–10x the savings of commoditized lease compliance audits.

Choose a lease audit provider that has:

• Experienced forensic CPAs with building operational, financial and accounting experience
• Nationally recognized real estate attorneys with complex, deal-level experience
• Former property managers and brokers
• FM/engineering staff

The best advisors prioritize resolution, minimize conflict, and align compensation with client outcomes.

At KBA, we are not pushy, we listen to our clients’ concerns, and only present solutions that will be both economically and practically successful.