Amount Saved: $212,679
Recovery Type: CAM/Operating Expenses; Real Estate Tax Base Year Correction
Client Use: Office
Overview:
As part of our lease administration service, National Lease Advisors (NLA) conducts detailed reviews of CAM statements to ensure compliance with lease terms. For a global office client, NLA discovered a real estate tax base year correction was overdue after the landlord failed to update the base year following a lease extension amendment—resulting in substantial overcharges that had gone unnoticed.
Challenge:
The client signed a lease extension in 2019 that explicitly reset the real estate tax base year to 2019. However, the landlord continued to calculate tax pass-throughs using the outdated 2013 base year. This oversight led to inflated charges on every reconciliation following the amendment, placing an undue financial burden on the tenant. Without a careful lease audit process in place, this misapplication could have continued for years.
Solution:
NLA’s team conducted a comprehensive review of the lease amendment and reconciliation documentation. Upon identifying the discrepancy, we:
- Confirmed Lease Terms: Verified that the 2019 lease amendment clearly reset the real estate tax base year.
- Audited Landlord Billings: Reviewed annual reconciliations to quantify the overcharges based on the incorrect base year.
- Engaged with the Landlord: Presented findings and documentation to the landlord and negotiated correction of the error.
- Ensured Future Compliance: Confirmed the base year was correctly reset for all future reconciliations to prevent recurrence.
Results:
- Immediate Savings: $120,459 in corrected charges
- Future Term Savings: $92,220 in projected savings through lease expiration
- Total Savings: $212,679
This case highlights the value of precise lease oversight and the importance of tracking base year resets during lease amendments. NLA’s proactive approach ensured that the client was only charged according to the agreed lease terms—saving over $200,000 and restoring billing accuracy.