Sep-2009 Class A Office Tenant - Los Angeles, CA


Incorrect Base Year Calculations (Approximately $137,000) – After reviewing the Base Year Expenses, RBJ determined that after the building had been sold, the current Landlord revised the methodology in which they determined several of the Operating Expense line items. RBJ prepared and submitted to the Landlord a fair and reasonable methodology in determining these Base Year Expenses.

It was also determined that the old Landlord had retroactively omitted some of the Base Year Operating Expenses the year prior to their selling the building to the new Landlord. RBJ contacted the old Landlord regarding this, and old Landlord and RBJ’s Client settle the issue amicably.

Capital Expenses (Approximately $8,000) - RBJ determined that several minor Capital Expenses had been included in the Operating Expenses in violation of Client’s lease.

Property Taxes (Approximately $16,000) – Based on information that RBJ obtained from the County of Los Angeles, RBJ determined that the assessor’s parcel for the building did not exist until four years after Client’s Base Year. Instead the building was a part of a larger assessor parcel. As a result, the assessed value levied on the larger parcel was incorrectly allocated to the building by the Landlord, thereby causing the property taxes to be understated in Client’s Base Year. RBJ was able to obtain and provide sufficient documentation and analysis to convince the Landlord of their error in this matter.

Insurance (Approximately $33,000) - RBJ determined that the new Landlord’s insurance pass through to the Client implicitly included earthquake coverage. The Client’s lease specified that any increases in insurance resulting in increased coverage amounts or types of coverage, cannot be included in Client’s Insurance Expense. RBJ prepared a detailed insurance allocation which determined the amount of insurance premium that the landlord should have allocated as earthquake insurance. The Landlord agreed with RBJ’s allocation and refunded the appropriate amount back to RBJ’s Client.

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