Jul-2009 Class B Office Tenant - Dade County, FL


Non Compliance of Controllable Expense Cap - (Approximately $198,000) – The Client’s lease specified that the Landlord’s controllable expenses in each year shall not be greater than 5% of the controllable expenses of the preceding year. From the inception of the Client’s lease, the Landlord had not been adhering to this lease clause. RBJ obtained as many of the prior operating expense reconciliations that we could find. Unfortunately the building had been sold once, and the lease had also been assigned once. As a result, RBJ was only able to assemble the operating expense reconciliations for the past three years. RBJ was still able to gather enough data, and then work the numbers back to get an approximate controllable expense amount for each lease year back to the inception.

The amount of overcharges as a result of this oversight was staggering; however, due to the circumstances stated above, our Client had to settle on an amount much less than the total due. Nevertheless, as a result of RBJ’s detailed analysis, RBJ was still able to negotiate an amount greater than the amount due based on the actual three years of operating expense reconciliations in hand.

Capital Costs - (Approximately $81,000) – Client’s lease explicitly excludes any capital items. Among other smaller capital items, the Landlord included the Client’s pro rata share of the cost of replacing a large HVAC chiller.

<< Back