Common area maintenance charges pass a share of the property’s operating costs to tenants. The lease defines what is included, how it is allocated, and whether the tenant may verify it.
What is commonly disputed:
Capital items. Whether a roof replacement or a new HVAC plant may be passed through as an expense, amortised over its useful life, or not at all. Leases frequently address this poorly and it is the largest single line in most disputes.
Administrative fees. A management fee stated as a percentage of other expenses, sometimes applied to items it should not be.
Gross-up provisions. Adjusting variable expenses to what they would be at full occupancy. Legitimate in principle, and a route to overcharging if applied to fixed costs.
Allocation. Whether the denominator is leased area or leasable area, and whether anchor tenants with negotiated exclusions shift costs onto everyone else.
Exclusions. Leasing commissions, tenant improvements for others, capital reserves, costs reimbursed by insurance, and expenses attributable to a different property.
The audit right. Most negotiated leases give the tenant a right to examine the landlord’s books within a period after the reconciliation. The clause usually carries conditions — notice, timing, no contingency-fee auditors, confidentiality — and the deadline is short. Tenants routinely let it pass. Where an audit finds an overstatement above a stated threshold, well-drafted clauses shift the cost of the audit to the landlord.