What if you threw a party and everyone came? What if you then charged everyone for the cost of that party as well as the cost of the gifts that you gave the attendees? Well, this is exactly what happens when your landlord charges the cost of Tenant Relations through to you in the common area maintenance pool.
Even though many leases have a prohibition against charging “promotional and advertising” costs through to tenants, the landlords attempt to pass through these costs by classifying them as standard costs for a “Class A Building.”
So what can you do? Many times, these costs are buried under “Administrative Costs.” You may not even know that they are there. If you are currently negotiating your lease, simply define these costs as “prohibited operating expenses.” If you are already locked into a lease, an audit will locate and bring these costs to light. Should you decide against a full audit, require the landlord to fully itemize the costs included under these broadly defined terms such as “Administration Costs” and “Repairs and Maintenance.” This information can usually be located in the annual detailed general ledger maintained by the landlord’s accountant.
In the end it pays to know where your money goes.
