Tenants with a net lease will be paying a large sum towards expenses. There are a great deal of expenses and allocations can be complicated. If there is some uncertainty about whether an expense should be passed along, tenants often pass it along anyway and landlords may not review leases to determine what the exact clauses state.
Tenants may wish to include a lease provision stating that they are entitled to hire a professional auditor to review the landlord’s accounts. Audit rights are useful because they can prevent litigation which brings with it the ability to inspect books. It may be useful to do an audit after the base year. The lease can specify who is able to perform the audit and specify the length of time in which to challenge the expenses. If tenants are disputing expenses, they can pay rent under protest into an escrow account. Tenants will want reimbursement with interest and landlords will want the tenant to not be able to terminate the lease. Another provision landlords often wish to include is that the results of the audit be kept confidential (other tenants will not know).
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