Electric Audit Saves Global Services Firm $450,000
Intensive lease audit process reveals tenant paid too high of a rate level
A global services firm was leasing space in the central business district of Minneapolis. The landlord was to supply the tenant electric current for the leasehold at the prevailing local public utility rate for comparable load, quantity and service. Upon the detailed inspection of the electric billings, industry benchmarks, as well as the tenant’s demand and usage, it was determined that the tenant was paying for electrical service at a rate level higher than what the lease required. Relying on certain language from the Lease and the cooperation from the local utility company, Deloitte assisted the client in the successful recovery of a cash settlement from the landlord, as well as assisting the client with establishing new lease language surrounding exact method of electric usage charges.
Total savings: $330,000 in cash and $125,000 over the remaining life of the lease.
Landlord billing errors do not only occur in Base Rent calculations and Operating Expense pass-throughs, but also can occur in additional service charges, such as landlord provided utilities or overtime services. During our intensive lease audit * process, we not only inspect Base Rent and Operating Expenses, but also inspect all lease related charges.
*The term "audit" as used herein is not and should not in any way be construed to be synonymous with the terms "audit," "audit procedures," "compilation," "review" or any form of "attestation" service as described in the pronouncements on professional standards issued by the American Institute of Certified Public Accountants.
As used in this document, ‘Deloitte’ means Deloitte LLP (and its subsidiaries). Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.