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Lease Audit Process Identifies Base Rent Overcharges

National company in the education industry saves $250,000

A national company in the education industry was leasing a building outside of Miami. Their lease called for annual adjustments to base rent based on a certain Consumer Price Index (CPI) for the local market. The lease further specified language to determine the appropriate replacement index if the original index was terminated. Before the first anniversary of the lease, the original CPI Index was terminated and replaced with what appeared to be an appropriate alternative. However, upon Deloitte Financial Advisory Services LLP’s (Deloitte FAS) inspection it was revealed that the alternative index being used by the landlord was mislabeled and in reality was an inappropriate alternative index reflecting inflation at rate double that of the lease specified replacement index. Deloitte FAS assisted the client in the successful recovery of the Base Rent overcharges.

Total savings: $250,000 in Base Rent savings to date

Overlying lessons:
Even simple rental calculations can be material. Deloitte FAS has developed a proven lease audit * process that will reveal the simplest to most intricate errors.

*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 for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

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