What conditions call for a lease audit
of your business?
Simply put, any time is a good time to perform a lease audit. However certain business conditions cry out for prudency.
- Where no detailed deep dive lease audit has been performed in the past three years of the term of your lease.
- In the first year of the term of a new lease. Rent is a major expense typically occurring over a long period of time. It’s prudent to start off verifying compliance of hard-won lease negotiations.
- After building ownership changes hands – particularly if the change in ownership occurs part way through the landlord’s fiscal year. Methodology and allocation of operating costs varies greatly by landlord. It’s important to note and verify whether the lease allows for any changes when the property changes ownership. It’s also important to ensure your billing is for 365 days only. Overlap or duplication of charges often occur when one year is being billed proportionately by two different landlords.
- When the overall operating costs increase over the prior year’s actuals is greater than five per cent and/or when year-over-year line-item expense variances are material (depending, of course, on market factors).
- When planning to renew your lease. A lease audit in the year or two before the renewal is often helpful in identifying any issues to be resolved during the renewal negotiation.
- When you’re considering a move. A lease audit of the year before the move ensures that operating costs are in compliance with the lease before the relationship ends and any leverage to recapture overcharges is potentially lost.
Whether your lease audit is basic or more in-depth, it’s no-risk, no cost (360 is paid with a percentage of the savings we recover) and will likely deliver significant savings to your bottom line.