Marks Paneth Lease Audit Services
Marks Paneth is highly skilled in auditing leases that include provisions for contingent rental payments. We have been very successful in helping our clients recover significant sums of money as a result of our diligence. We leave no stone unturned when reviewing tenant records in order to determine if rents have been unpaid. Our goal is to help property owners monetize existing leases by recovering unreported revenues.
At the same time, it is very important to us that we maintain a very professional approach when dealing with the landlord’s tenants in order to ensure that the landlord/tenant relationship remains harmonious.
Some of the contingent rent provisions in leases that we audit include: percentage rent; subletting profits; transaction payments; other charge-backs, including tenant reimbursement for third-party professional fees in connection with estoppels certificates and lease modifications; operating expense escalations; common area charges and gross-up provisions. We have audited tenants in a variety of industries, including commercial office buildings; retail spaces and complexes; the hospitality sector (hotels, restaurants, entertainment complexes and theaters); industrial space; bio-technology and not-for-profits.
A typical lease audit involves the following steps:
• Marks Paneth preliminary review of contingent lease provisions and tenant financial statements, if available.
• Marks Paneth communicates preliminary findings/observations to landlord.
• Marks Paneth prepares preliminary tenant information request.
• Landlord contacts tenant to inform them that a lease compliance review will be performed and transmits preliminary information request to tenant.
• Kickoff meeting or call between tenant and Marks Paneth to discuss preliminary information request, timing and deliverables.
• Marks Paneth review of detailed tenant information.
• Marks Paneth issues draft report of findings to landlord.
• Meeting with landlord to discuss findings.
• Finalize draft report after discussion with landlord.
• Landlord delivers report with findings to tenant.
• Marks Paneth answers any questions posed by tenant and deals with any issues presented by the tenant. In short, Marks Paneth will deal with all matters pertaining to the lease audit until a resolution is reached.
• If requested, Marks Paneth can negotiate settlement agreements with tenants or provide litigation support services as needed.
In addition to lease audits, Marks Paneth also has a wide breadth and depth of experience providing the following lease-related services to Landlords:
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