Although some landlords may prefer that their tenants not audit their leases, most landlords realize that tenants are required by corporate governance rules as well as by their internal audit departments to ensure that all lease charges are consistent with the contractual obligations (as established in the lease).
As lease audits have become more prevalent, most landlords today see them as a normal part of lease administration, especially given the fact that without conducting these reviews, there is no way for the tenant to verify its costs.
One of the best tests of how well an audit firm preserves its clients’ relationships with their landlords is the incidence of litigation over lease audit claims. A high incidence of litigation indicates that the firm is unable to persuade landlords of the validity of its claims, and the failure to effectively articulate positions.
For a more detailed discussion on how to maintain fairness in a lease audit, see KBA’s Lease Tip, “Fairness: The Goal of Lease Audits.”
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