Combining a lease audit service with a lease management system, such as Visual Lease, offers compelling benefits for organizations managing commercial leases. Commercial leases are complex legal documents, each with its unique market peculiarities requiring sophisticated legal and accounting expertise. Continuous monitoring of leases is essential, as landlord charges occur frequently, and erroneous charges, including escalation rental increases and Common Area Maintenance (CAM) charges, require constant review and reconciliation. Here’s why integrating these services can significantly improve your lease management strategy.
Improved Data Organization and Lease Administration
One of the primary benefits of having a lease audit service integrated with your lease management system is ensuring that the system contains all the necessary data fields, organized in a way that facilitates efficient lease administration. The audit firm plays a crucial role in setting up the system to capture all relevant lease details, reducing the risk of errors and ensuring that the lease management process is streamlined.
Identification and Reconciliation of Problematic Charges
A lease management system is effective at identifying problematic charges and flagging them for review. However, when combined with a lease audit service, this process is significantly enhanced. The lease audit staff can scrutinize flagged charges and reconcile them with the lease provisions, ensuring that your organization is not overcharged.
Mitigating Escalation Charge Errors
For example, one common issue involves landlords including capital expenses in CAM charges, which violates most CAM agreements. A skilled auditor can identify these discrepancies, potentially saving your organization significant amounts of money—sometimes in the high six figures.
Access to Specialized Legal and Accounting Expertise
During the life of a lease, there will be periodic instances, such as lease renewals, option exercises, and the handling of estoppels, where specialized expertise is required. Lease administrators may not always possess the necessary legal or accounting skills for these tasks. By integrating a lease audit service, you ensure that these specialized needs are met. The lease audit staff can provide the necessary expertise to handle these complex leasing actions, filling any gaps in knowledge and ensuring compliance with lease terms.
Effective Management of Escalation Charges
Perhaps one of the greatest benefits of having a lease audit service associated with your lease management system relates to the management of problematic escalation charges. While the lease system can flag unusual charges, the presence of a dedicated lease audit team ensures that these charges are thoroughly examined and reconciled according to lease provisions. This combination saves both time and money by preventing overpayment and ensuring that only legitimate expenses are included in CAM charges.
Integrated Solutions for Maximum Efficiency
KBA is unique as a lease auditing firm in developing a state-of-the-art lease management system. Typically, a corporate client would need to contract separately with a lease auditing firm to conduct periodic lease audits. At KBA, these services are fully aligned and available as part of the Visual Lease management system. The synergies between these two entities—both in terms of management and expertise—accrue directly to the client, ensuring efficient, time-saving, and cost-saving benefits.
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Integrating a lease audit service with a lease management system like Visual Lease offers substantial advantages, from ensuring data accuracy and compliance to effectively managing complex lease charges. By combining these services, organizations can achieve greater efficiency, reduce costs, and ensure that their lease portfolios are managed in full compliance with legal and accounting standards. Contact us today to learn more about how Visual Lease can help you optimize your lease management and achieve significant savings.
