The Major Things to Know About Lease Audits

27 May 2021

What are Lease Audits?

A lease audit is a systematic review of lease agreements, lease languages, and associated accounting. For decades real estate businesses have benefited from lease audits.

  • To maximize the return on investment,
  • Risk analysis,
  • Reducing occupancy costs, and
  • Improve the company’s financial status.

“Lease audit, a tool to get tenant a fair deal on a property.”

A professional lease auditor examines the lease agreement for tenant’s additional charges and ensures they are not overpaying.

Why is it Challenging for Real Estate Firms to do Their Lease Audits?


Realtors primarily work on a time crunch when they have to close a deal on a property. Lease audits take time to review; experts have the support and knowledge to audit in a short span.

Domain Experts:

Lease auditors require in-depth knowledge of real estate law, accounting, engineering, and property management.

Professional Lease Auditors Review the Following Elements:

  • CAM charges
  • Base rent
  • Insurance
  • HVAC / Utilities
  • Real estate tax
  • Tenant chargebacks
  • Occupancy related costs
  • Floor plan verification

Things to Know About Lease Audit

Audit Rights:

Tenants have the right to review the charges in the written lease agreement. Most real estate firms can also restrict the scope of lease audit of a tenant’s additional costs. Restricted access doesn’t necessarily mean that the tenants cannot review the lease expenses.

Audit Window:

The tenant’s CAM reconciliation audit window varies from lease to lease. The typical window for an audit varies from 30 to 180 days. A short audit window requires tenants immediate attention.

Audit Favoring Landlord:

The expenses most likely are beneficial for the landlord to fasten their capital returns. The chances of having the supporting documents of unfair charges are meek to run a lease audit.

CAM Reconciliation– Balance or Credit Due

The CAM reconciliation result could either be Balance or credit due. It is quintessential to do a review of the charges irrespective of compensation or credit due. If the CAM reconciliation result is credit owing, there is a chance you might have overpaid.

Professional Lease Auditor

Not all lease auditing agencies have a team of experienced or qualified individuals to handle the annual lease audits. It is pertinent to do a bit of research before partnering with a third-party service provider before handing over responsibility.

Benefits of Outsourcing Lease Audit

Landlords handling multiple properties find it challenging to review all the documents. On the other hand, tenants might not understand the lease terminology. Both tenants and landlords might overlook important details and cash loss along the way. Why outsourcing the lease audit is essential?

  • To uncover hidden charges
  • The transparency between landlords and tenants
  • Are you getting a fair deal?

A detailed lease audit is vital for effective decision-making in a real estate business. Professionals at PreludeSys do a systematic forensic audit of leases to benefit both landlords and tenants. Remember to hire the right lease auditor.

Get advanced insights into your lease expenditures through high-quality lease audits. Get in touch with us to know more.

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