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The Hidden Expenses in Your Commercial Lease

Is your company overpaying your landlord? You may not even realize it. Or, perhaps you have a feeling that you are being over-charged but do not have the ability to prove it. It may well be your right to recoup those purloined expenses from your landlord.

As a tenant, your company is responsible for paying its share of the landlord’s office building operating expenses, such as taxes or insurance. This is part of your lease agreement. However, some building landlords use this provision of your lease agreement as an opportunity to squeeze out extra money from tenants.

If you are not paying attention to what is being invoiced each month, you could be overpaying your share of expenses.

How Does the Office Building Landlord Squeeze Out More Money From You?

In your office lease agreement, the monthly rental rate is fixed over a period of time. However, since operating costs fluctuate, it is a common practice for landlords to estimate annual expenses up front, set a monthly rate, and then reconcile the details later.

This practice of estimating current year operating expenses and billing the tenants for such estimate is common practice. Any differences between what had been paid as an estimate, and what the landlord calculates as actual, is reconciled during the following year.

This entire process is covered in the lease document but putting it into practice with real numbers, is subject to wide interpretation and mathematical error.

If you are not checking the landlord’s interpretation and calculation, you may well be overpaying, as many tenants unknowingly do.

Moody Rambin Can Help You With Recoverable Expenses

A commercial real estate broker can provide you with a well-negotiated lease that will subject your landlord to an audit of the operating expense bill rate.

This audit will provide you with safeguards against the landlord over-charging your share of operating expenses. It will also ensure that the landlord is compliant with industry and market practices.

Moody Rambin has nearly 50 years of experience and a team of over 100 commercial real estate experts. We have the tools to expertly negotiate your next office lease and ensure you get a fair deal.

It’s our job to ensure you are not overpaying this critical portion of your lease. Work with the experts in Houston commercial real estate to ensure your landlord is held accountable. This way, your company will be able to keep more of your hard-earned money.

Request an Audit of Your Lease

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