A final consideration is the tenant’s right
(NOT option) to audit and/or inspect the
landlord’s books and records to confirm
and validate the expenses charged to
the tenant. While few occasions arise to
exercise such rights, it is essential that in
such instances, the tenant and its financial
professionals have reasonable access at
reasonable times to the landlord’s accounts,
bills, and records to understand operating
expenses, including potential landlord
liability for tenant’s audit expenses in the
event that expenses were overcharged by
____%. Be sure that a clear and equitable
mechanism is included to handle over- or
under-payments of expenses. In this re-
gard, the auditing costs may be incurred
by the property manager, or the tenant’s
or landlords respective accountants. When
the tenant claims being overcharged by the
landlord, some landlords will want those
tenants to pay any and all costs incurred
by the landlord or their accountant to prove
the overcharges. Further, the landlord may
Our objective is to inform and suggest potential negotiating
strategies to enable you to continue to represent your clients
(landlord/seller or tenant/buyer) at the highest level.
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seek to include lease language that any au-
diting of the landlord’s books by the tenant
must be done through a named or “Big 4”
accounting firm. Such provisions are in-
tended to discourage many tenants from
exercising their audit rights, when retain-
ing such a firm usually requires substantial
non-contingent fees.