Dale H from Indianapolis, IN. IPL territory. My client is a restaurant that leases space in a strip mall. The electric account is in the landlord name because the landlord pays the utility bill and passes the cost through to tenants as part of the CAM charges. My client wants me to audit the electric bill but the LOA needs to be signed by the account holder — which is the landlord, not my client. The landlord refuses to sign because he does not want a third party poking around in his utility accounts. How do I get around this?
LOA complications when the client is a tenant not the building owner
Dale, the tenant-landlord LOA problem is one of the most frustrating situations in commercial auditing. You have a willing client (the tenant) but no access because the account is in someone else name. A few approaches: First, check the lease agreement. Many commercial leases give the tenant the right to audit CAM charges, which would include utility costs. If the lease has an audit clause, the tenant can demand the utility records from the landlord without needing a utility LOA. Second, some utilities will release billing data to a tenant who can prove they are paying the charges, even if the account is not in their name. IPL might have a policy on this.
Dale, I deal with this in Indianapolis too. IPL will release billing data to an authorized tenant representative if the tenant provides a copy of the lease showing the utility cost pass-through provision AND the landlord account number. It is not a standard LOA — it is a tenant data access request. Call IPL commercial billing and ask for the tenant access form.
Greg, I had no idea IPL had a tenant access form. Calling them today.
Called IPL. They confirmed the tenant data access form exists but it only provides billing summaries — no interval data and no authority to file disputes. The billing summary is enough to identify most errors but if I need to file a correction, the landlord still has to be involved. This gets me started at least.
Dale, here is a strategy that has worked for me: do the preliminary audit using the tenant access data. If you find errors, present the findings to the TENANT with a dollar amount. Then have the tenant present it to the landlord. When the landlord sees that their property has a $12,000 billing error, they suddenly become very cooperative about signing LOAs and filing corrections. The landlord who refuses to let you look is often the same landlord who happily signs when there is money on the table.
Rachel, that is exactly the approach I am going to take. Get enough data through the tenant access form to identify the error, quantify it, and let the money do the convincing. The landlord is not going to leave $12,000 on the table just because he does not like third parties looking at his utility bills.
This two-step approach — tenant data for the preliminary audit, landlord cooperation for the formal dispute — works in almost every tenant situation. The key insight is that you do not need full LOA access to FIND the error. You only need it to FIX the error. And once the error is found and the dollar amount is known, the landlord resistance usually evaporates.