A recent percentage rent audit revealed the tenant was underpaying rent by $600k+ per year.
A percentage rent audit verifies the accuracy of tenant reporting under leases that require rent to be paid based on a percentage of sales. A typical percentage rent audit would include a review of the tenant’s lease, tax returns, profit and loss statements, receipts, and sales reports. An audit may require an on-site examination of records and observation of accounting practices. A percentage rent audit must also be flexible to adapt to the accounting methodologies used by the tenant. But no matter how the process is customized, the result is to verify that percentage rents are being paid in accordance with the lease.
If necessary, Chelepis will prepare an audit report that summarizes our findings with the lease language, analysis, calculations and supporting exhibits. The report will note any discrepancies with the lease and calculate any percentage rent amounts due. Chelepis can manage the resolution process with your tenant if necessary. Chelepis has the expertise to successfully negotiate a resolution while maitining a positive relationship with your tenant.