What Is Escalation, A Gross Up

Operating expense adjustments by the landlord is source of confusion and frequent disagreements between landlords and tenants. The lease outlines who is responsible for paying certain expenses, who bares the expense (tenant or landlord) further requiring  the expenses be adjusted to reflect 95% occupancy.

Escalations or additional rent paid by tenants can represent 10% to 20% of portfolio revenue  which increases building value.

Too Err Is Common

Most commercial tenants are routinely overcharged by their landlords due to errors.  But if you are a tenant in an office building, industrial  building, or strip shopping center that is being overcharged, how could you know?  You’d call us at Dalmont Cantwell Partners.   We find lease errors and recover your losses.

  • In the specific area of commercial leases, errors are the rule, not the exception.  Landlords frequently make “unintentional errors” that are very, very costly to their tenants.
  • In the years since we first analyzed the accuracy of commercial leases, we have found that the overwhelming majority contain mistakes in calculation of Common Area Maintenance (CAM) charges.
  • We have discovered that our clients have been overcharged as much as 12 1/2% of the entire cost of their lease.

Are you being overcharged?

The odds are excellent that you are.  But it takes a lease analysis professional to help you investigate and identify those overcharges, and then take action to obtain reimbursement for you.
  • Caps on operating expenses are ignored by property management.
  • Errors in calculation of real estate taxes, errors in reporting the building rentable square feet,  pro rata share changes have been made by property management.
  • Improper calculations of the gross up provisions of the lease document.
  • Items are included in the operating expenses that may have been excluded by  the operating expense lease  clause.
  • Errors are found in 50% of audits and most errors favor the landlord

We will give you answers to your specific question, are your lease CAM charges correct?

 

Lease Audit Services

With complete professionalism, tact, and accuracy, we will perform the following services, without charge.  If lease errors are discovered, we will point them out to your landlord, and seek correction and compensation.  Our fee will be 50% of the dollar amount of the recovery.  if we discover no errors, we will charge you no fee.

The Lease Audit

We examine your lease and any associated documents to evaluate any possible discrepancies.

We provide a breakdown of any discrepancies between your leased premises and your leasing documents.

We provide an accounting of monies you have overpaid, and of projected recoveries to which you are entitled.

We represent in rectifying errors and recovering losses.

Won’t my Landlord Be Upset?

Even though you are the “customer,” there is no point unnecessarily jeopardizing your relationship with your landlord.  We clearly understand this, and delicately handle all negotiations on your behalf, calling upon staff of commercial lease experts–including legal representation, which is rarely necessary.

Through the years, most lease errors uncovered have been unintentional, and the landlords involved were usually far more embarrassed than upset.  Most have been glad to have the matter corrected.

Besides, the discovery of an error in your lease will give your landlord a strong reason to settle the matter quietly and quickly, lest dozens (or hundreds) of other tenants–who probably share the discrepancy–find out.