Helped a Law Firm Recover Wrongful Maintenance Charges for a Tenant Through Thorough Financial Analysis

A large commercial tenant, who occupied 90% of a building, believed they were overcharged for their share of the building’s operating expense. The tenant engaged legal counsel to bring their case to court.

Legal counsel engaged our team to review the lease agreement, including the sections that discussed operating expense and recovery calculations.  We interviewed the landlord and property management to gain a deeper understanding of the accounting policies and the roles and responsibilities of the employees who prepared the Common Area Maintenance (CAM) reconciliation. Additionally, we reviewed financial reports, including historical CAM reconciliations, operating statements, general ledgers and vendor contracts and invoices. We found that when the property was sold during the year in question, the current owner calculated the tenants share of operating expense based on the prior owner, which was incorrect. We prepared the deliverables which included a formal report of findings and recalculations along with supporting exhibits to counsel to be used in court proceedings.  We attended the court proceedings and were available to testify to support our findings. 

Based on our input, the court found that the landlord overstated operating expenses which resulted in an $800k reduction for the tenant.