Frequently Asked Questions
What is a lease audit?
A lease audit is a comprehensive analysis of a tenant’s lease and occupancy agreement with their landlord. The objective of this process is to verify that all charges being paid by the tenant are in strict compliance with the terms of the lease.
How does an audit affect my relationship with my landlord?
bfi is highly aware of the importance of maintaining a positive professional relationship between a tenant and their landlord. We never contact your landlord without your prior written approval. Professional building owners and managers realize that a lease audit is a routine part of conducting business today. Our non-adversarial approach allows us to obtain any savings due to our client without jeopardizing this sensitive relationship.
How long does a lease audit take?
Once the necessary documentation has been obtained, the preliminary audit is usually completed within a period of two weeks. Depending on the scope and complexity of the issues that are uncovered, final settlement can take from a few weeks to a few months. We maintain continuous communication with our clients during this process.
Why doesn’t my accounting firm do this?
A lease audit requires a firm with real estate expertise rather than a firm with a general financial background. While your accounting firm may be able to do a financial reconciliation of your rent expenses, they are typically not expert at interpreting all of the nuances of a complex lease agreement.
Why are errors and discrepancies usually found?
Your lease is a complex document that changes from year to year. We find that errors usually occur for three reasons: 1) Human error. 2) Unique provisions in your lease that differ from the standard lease for a building. 3) Misinterpretation of the lease language. We have found significant errors in over 70% of the leases we have audited!
When should I have a lease audit done?
Annually when you receive your notice of proposed changes from your landlord. Some leases define a specific time frame during which lease audits may be conducted. We would coordinate with you and your landlord to work within the structure of your lease.
Why not use our in-house financial department to audit our lease?
We audit more leases in one month than a typical financial executive will see in their entire career. Lease auditing is a specialty function and is best performed by an outside firm with the knowledge and experience necessary to do the job correctly.
Does bfi represent landlords?
No. bfi works exclusively for tenants and does not represent any landlords. We feel that this would create a potential conflict of interest that could prevent us from properly representing the tenant.
What geographical area do you service?
bfi is able to perform lease audits anywhere in the United States. An introduction to your local person in charge of facilities is typically all we need to begin our auditing process.
What does a lease audit cost?
bfi performs lease audits on a contingency basis. Our compensation is a percentage of the savings that are realized by the client. There is absolutely no cost to the client and we are not paid until the client has actually received their savings.
What information do you need to conduct an audit?
We need a copy of your current lease agreement and any modifications or amendments to it. Also, the annual statements from your landlord showing any changes to your rent structure. Generally, any paperwork or correspondence regarding your lease will be helpful in obtaining the greatest possible savings.
Who should we contact for more information?
Please feel free to contact John P. Canavan, Director of Business Financial Insights. He can be reached by phone at 973-795-6467 or e-mail at jcanavan@bfifurniture.com.
See also:
• Lease Audit Process
All trademarks property of their owners.