Ask Questions

Most tenants aren’t experts in building operating costs—yet they’re obligated to pay them. While a well-negotiated lease can include protections, leases are often filed away and hard to decipher when revisited.

The first step? Ask questions—starting with the property manager. Good ones value tenant relationships and can provide clarity. Landlords often offer limited info on invoices, but usually have deeper data for those who push. Don’t hesitate to ask for details.

Operating costs should be consistent with similar buildings in the area. If something seems high, professionals will compare line items—flagging issues like inflated management fees (which shouldn’t exceed 3% of gross revenue), overbilled internal services, or misclassified capital expenses.

If things still don’t add up, use the lease’s audit clause. You can bring in a professional to review the charges—though remedies are often limited to reimbursement and audit costs.

Bottom line: Operating expenses are complex and not always transparent. Tenants must stay proactive—ask questions, scrutinize invoices, and bring in experts when needed.