March 18, 2019
It’s that time of year again to be on the lookout for your operating expense statement from your landlord.
What are Operating Expenses? Operating expenses include any costs to maintain, repair, and operate a building. This includes the space your company occupies as well as a “pro-rata” share of the common area spaces such as lobbies, restrooms, and shared conference rooms. Additional expenses can come from landscaping, parking lot maintenance, and snow removal.
How does this affect tenants? During the last quarter of each year, Landlords and property managers are busy budgeting for operating expenses in the coming year. From January through March, tenants should receive a review letter of their operating expenses from 2018 and a reconciliation statement of adjusted costs for the future. Most often, these statements are a bill for uncollected funds – where tenants owe the difference according to their lease agreement.
Why does it matter? It is critical for tenants to pay attention to the reconciliation statements sent from your landlord, as many have a window of 30-60 days after receipt in order to review and dispute any inaccuracies. Make sure your statement reflects your lease terms. For more information about common mistakes landlords make, click here.
Did you know? RCR offers many complimentary services for our clients, including a yearly review and audit of your operating expense statement. So whether you’re an OpEx expert or new to the tenant game, we’ve got you covered.