Glenda from Nampa. Auditing a multi-tenant commercial building where the landlord pays the master utility bill and allocates costs to tenants through a RUBS formula. Found that the building qualifies for a lower rate class than it is currently on. The savings would flow to the landlord, not the tenants who have been effectively overpaying through inflated allocations. Is the landlord our client here or should I be thinking about the tenants' interests as well?
Multi-tenant building — who gets the rate class benefit?
Dale from Columbus. Your client is the landlord. You were engaged by the landlord. The savings go to the landlord. What the landlord does with those savings in terms of passing them through to tenants is entirely their business decision.
That feels right but it is a little uncomfortable when I think about the tenants who were overpaying.
Michael from Albuquerque. The tenants were paying what the lease says they pay. The landlord's utility allocation is a landlord-tenant issue. Your role is to identify billing errors and recover money for your client. You are not the tenants' advocate unless they hired you.
Dale again. That said, if the leases require the landlord to pass through actual utility costs rather than estimated costs, there may be a separate legal question for the landlord about their obligations to tenants. That is worth flagging as a side note — not your problem to solve, but worth them knowing.
I had not thought about the lease language. That is a good point. Going to suggest the landlord review the tenant lease language with their attorney before deciding how to handle the savings.