 Understanding and reviewing the ‘hidden rent’Rick Burke Corporate Real Estate Journal, 2014, vol. 3, issue 2, 95-100 Abstract: Tenants must understand their lease before signing it. Much too often, a tenant looks back and realises they have agreed to something that is now costing them thousands of dollars per month. This paper opens the door and introduces the tenant to the many types of possible overcharges. It looks at several basic areas of overcharging and explains why they exist and how to avoid them. These areas include pro-rata share allocation, administrative charges, non-common area maintenance (CAM) expenses, real estate taxes and caps. The paper also looks at some specific overcharges related to office and industrial leases such as base year and gross-up clauses. Understanding all the ins and outs of a lease is very difficult, especially for someone not in the real estate business. As with most things, the more detailed it gets, the more complex it becomes. This is especially true for additional rents such as CAM, operating expenses, real estate taxes, insurance and other monetary lease items. These items, if not fully understood, will become ‘hidden rent’. Keywords: lease auditing; lease administration; occupancy cost; operating cost; lease abstracting; lease audit; hidden rent; common area maintenance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:aza:crej00:y:2014:v:3:i:2:p:95-100 Access Statistics for this article More articles in Corporate Real Estate Journal from Henry Stewart Publications |
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