Lease pass-through work is a different discipline from utility auditing and mixing them up produces bad findings.
In a straight utility audit your counterparty is the utility, your authority is the tariff, and your remedy is a rebill. In a pass-through audit your counterparty is the landlord, your authority is the lease, and your remedy is a reconciliation adjustment. The tariff is background information.
What that changes in practice.
The lease governs, not the bill. A charge can be perfectly correct as billed by the utility and still not be passable to the tenant under the lease. Read the operating expense provisions, the exclusions, the gross-up clause and the audit rights clause before you look at a single statement.
Allocation method matters more than rate. Most recovery in pass-through work is in how the total was divided — square footage versus submeter versus occupancy versus some historical percentage nobody can explain — not in whether the underlying bill was right.
Check what is in the pool. Charges for vacant space, for landlord-controlled areas, for capital items dressed as operating expenses, and administrative markups applied on top of a utility charge that already includes the utility's own fees.
And watch the audit window. Lease audit rights are usually far shorter than any utility limitation period and they are strictly enforced.
In a straight utility audit your counterparty is the utility, your authority is the tariff, and your remedy is a rebill. In a pass-through audit your counterparty is the landlord, your authority is the lease, and your remedy is a reconciliation adjustment. The tariff is background information.
What that changes in practice.
The lease governs, not the bill. A charge can be perfectly correct as billed by the utility and still not be passable to the tenant under the lease. Read the operating expense provisions, the exclusions, the gross-up clause and the audit rights clause before you look at a single statement.
Allocation method matters more than rate. Most recovery in pass-through work is in how the total was divided — square footage versus submeter versus occupancy versus some historical percentage nobody can explain — not in whether the underlying bill was right.
Check what is in the pool. Charges for vacant space, for landlord-controlled areas, for capital items dressed as operating expenses, and administrative markups applied on top of a utility charge that already includes the utility's own fees.
And watch the audit window. Lease audit rights are usually far shorter than any utility limitation period and they are strictly enforced.