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Rpcon masterclass s204-fundamentals-desk_audit - jerry king
- 1. Fundamentals of the Desk Audit Presented by: Jerry King Lease Administration Masterclass Friday, 23rd March 2012
- 2. Session Objectives • Overview Elements of a CAM Reconciliation • Identifying Key Issues • Spotting the errors • Collecting Over Payments Lease Administration Masterclass Friday, 23rd March 2012
- 3. Getting Organized • Legal on board? • Lease review: abstracts, caps, fixed…etc. • Did you receive back-up? Request it! • Prior years reconciliations. • Collecting your findings – Letter Writing • Tracking your savings. Lease Administration Masterclass Friday, 23rd March 2012
- 4. Our Basic Rules • Lease determines what can or cannot be charged back by the Landlord. • Landlord is responsible for providing reasonable documentation supporting expenses charged on reconciliations. • Expenses must be necessary and relate directly to common area operations. Lease Administration Masterclass Friday, 23rd March 2012
- 5. What we need to Check • Pro-Rata Share • Administration and Management Fees • Expenses • Capital Items? • Overhead Expenses • Offsite Expense Lease Administration Masterclass Friday, 23rd March 2012
- 6. Tools of the Trade Leases, Invoices and Documents • Reconciliation and supporting documents – Itemized CAM Expense Listing • Depreciation schedules – GLA Schedules • Excluded Tenants sq.ft / sqm (Anchors/Majors, Outparcels, etc) – Real Estate Tax and Municipal Rates Charges – Insurance Charges NRTA | Focus 08-Solutions Lease Administration Masterclass for Success Friday, 23rd March 2012
- 7. Typical Questionable Expenses • Repairs/Maintenance • Off-site Labor • Security • Snow Removal (US) • Landscaping • Utilities • Trash / Grease Trap • Insurance Lease Administration Masterclass Friday, 23rd March 2012
- 8. Pro-Rata Share • Most critical element of the CAM invoice. • All leasable space, including major department stores and outparcels, are included in the pro-rata share unless specifically excluded in the Lease. Lease Administration Masterclass Friday, 23rd March 2012
- 9. Pro-Rata Share • Formula: Premises/GLA=Pro-rata share • GLA (area) vs. GLA (average) • Area based on actual square footage of all buildings regardless of occupancy • Average based on occupancy rates of all square footage of buildings • Kiosk – Storage Trailers - Other income Lease Administration Masterclass Friday, 23rd March 2012
- 10. Lease Caps • Prior to beginning audit, perform test on Lease Caps to determine if complete Reconciliation is necessary. • Are there any exclusions from the Lease Cap calculation? • Is Cap based on prior year PAID or Cumulative Cap? Lease Administration Masterclass Friday, 23rd March 2012
- 11. Administrative Fee • Charged by Landlords as compensation for off- site management & other non-direct expenses. • Generally based on a % of expenses, but can be based on actual expenses or a flat fee. • If the Lease is silent with respect to an admin fee, an admin fee cannot be charged! Lease Administration Masterclass Friday, 23rd March 2012
- 12. CAM or NOT? • Promo / Advertising Fees • Pylon Signs • Bank Fees • Employee Incentives • Christmas Decorations • Vacant Land Lease Administration Masterclass Friday, 23rd March 2012
- 13. CAM or NOT? • Off Site Expense • Property Manager’s Car • Maintenance Vehicle / Golf Carts • Seasonal Flowers • Promotional Events / Advertising • Security for Special Events • Muzak Lease Administration Masterclass Friday, 23rd March 2012
- 14. Contact Information Jerry King • jking@rent-research.com • www.rent-research.com • Rent Research Consultants, Inc. PO Box 372 Swansea, MA 02777, USA • Phone 1-866-635-5762 • FAX 1-888-473-1121 Lease Administration Masterclass Friday, 23rd March 2012
Notas del editor
- For many companies-occupancy cost is the 2nd largest expense-right after payroll ( Make this our first give away question).