A Fortune 100 global telecom company that occupied multiple buildings in an office campus.
The lease described in detail how the rent was to be determined—how it was to be calculated on a specific finished building size at a specific rate per square foot. The lease also called for a separate adjustment in rents on an annual basis. Because there were multiple buildings with different commencement dates, to clarify the rents, the parties executed an amendment that set forth a schedule of rents for each space and for each year. For 8 years the landlord billed all of the charges according to the rent schedule, and also billed the tenant for the separate adjustments called for by the lease. KBA verified that all of the charges were consistent with the rent schedule and the adjustment clause.
KBA’s audit process did not stop there. KBA then recalculated the rent schedule in the amendment to verify that the negotiators and attorneys drafted the lease properly. By doing so, KBA discovered that the rent schedule not only included the underlying rents, but also incorporated all of the annual increases. Apparently, when the attorneys drafted the amendment, they neglected to void the annual increase language. By billing the tenant for these increases, the landlord collected them twice—once in the rent per the schedule and again in the separate charges.
Despite a complete lack of documentation, KBA demonstrated that the lease’s written description of rent reflected the true intent of the parties, and proved that the rents in the amendment created a windfall for the landlord. KBA was able to convince the landlord that the rents that had been billed for 8 years were incorrect, and recovered $1.5 Million in savings.
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