The power of lease audits: savings, compliance, strategic delivery, and more

BENONI, South Africa - July 3, 2024 - PRLog -- A lease audit is a powerful tool that not only untangles these complexities but also uncovers hidden savings, ensures compliance, fosters better business relationships, and supports more strategic decision-making.

But what exactly is a lease audit, and why should it matter to businesses and property owners alike?

Ken Gerber, COO of Cushman & Wakefield | BROLL explains that a lease audit is a deep dive into the details of a lease to ensure that all its terms and obligations are being met and that neither party is being shortchanged.

"The importance of lease audits cannot be overstated. For tenants, a lease audit can reveal discrepancies or errors in billing that might result in significant refunds or savings. For landlords, it ensures that they are receiving the correct payments and that the property is being maintained according to the lease terms. Essentially, lease audits help both landlords and occupiers achieve their financial and operational goals," says Gerber.

The devil is in the details

In essence, a lease audit is the comprehensive review and verification of the accuracy and compliance of a commercial lease agreement. This meticulous process covers various aspects, such as rent, operating expenses, taxes, maintenance, utilities, and other charges that could be either billed to the tenant or paid by the landlord.

Beyond financial scrutiny, it also assesses the market value of rent, what services should be provided at the property and by which party, and other lease terms and events.

"With an up-to-date lease audit in place, both the occupier and the landlord can enjoy a smoother relationship by being on the same page regarding their obligations and having a clear understanding of their responsibilities. This can lead to greater satisfaction and trust, fostering a more cooperative, productive, and even longer-lasting partnership," says Natasha Bruwer, Managing Director for Occupier Services at Cushman & Wakefield | BROLL.

Conducting a lease audit is a detailed and structured process. It can be done in-house by a tenant or a landlord, but due to the wide range of expertise needed, it is usually placed in the skilled hands of a third party experienced in commercial real estate and lease auditing, especially in a specific market, with strong professional ethics, including integrity, confidentiality, and impartiality. Beyond this, proficiency in data collection, analysis, and reporting has become essential.

For Cushman & Wakefield | BROLL, a critical part of a lease audit is taking a data-focused approach. It's essential to gather and analyse complete and accurate data about all leases. This helps drive strategy and ensures better transaction execution.