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What is a lease audit?
A lease audit is a thorough review of the expenses which a landlord pays and then passes on to a tenant. The purpose of an audit is to make sure that the tenant is being accurately billed.
What can a tenant expect from an audit?
An audit will provide two key end-products for a tenant. First, they will know if the landlord has properly billed them and if not they will be reimbursed for any excess payments. Second, as a result of the audit the landlord will not be permitted to make similar mistakes in the future, which in-turn will save the tenant future dollars.
How does the audit process begin?
PSA will review any tenants lease and expense reconciliations, received from their landlord, at no charge in order to assess the need for an audit. In about one third of these reviews PSA does not recommend going forward with an audit for any number of reasons. If PSA recommends doing an audit, and the tenant agrees, then an agreement is signed between the parties and the following sequence of events takes place: i) an audit notice is given to the landlord, ii) the tenant sends PSA all of their lease documents and as many of the annual expense reconciliations as are easily accessible, iii) PSA contacts the landlord and requests an initial list of information with which to start the audit.
How does the tenant keep abreast of what is happening with the audit?
PSA will copy the tenant on all correspondence with the landlord and will give the tenant periodic updates as to the process being made.
What is the time required by a tenant?
Other than providing PSA with all lease documents and expense reconciliations, and giving the landlord the audit notice there is virtually no other time commitment required by the tenant. If in the infrequent occasion that PSA is having trouble obtaining responses from the landlord the tenant may be asked to communicate with the landlord in order to move the process along.
What does PSA do to avoid any friction between the tenant and landlord?
PSA prides itself in never becoming a wedge between the tenant and the landlord. This is accomplished by understanding how best to achieve the desired results for the tenant without being overbearing to the landlord.
Does PSA audit large portfolios?
PSA does audit large portfolios. PSA will review each lease along with any associated expense reconciliations in order to determine if that particular lease is a worthy audit candidate.
What size lease is appropriate to audit?
PSA will review any lease and provide its opinion about the necessity for an audit, regardless of the size of the lease. Go to the "Articles" section of this web-site and read the article about what leases tend to be the best audit candidates.
Does PSA also work with landlords?
PSA only represents tenants, thus avoiding any conflict of interest.
How is PSA compensated?
PSA is paid a percentage of the amounts reimbursed to the tenant. In cases where the lease does not permit a contingency based fee PSA will develop a payment structure that works for both the tenant and PSA.
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