In today’s competitive real estate market, where the cost of utilities and infrastructure use are always rising, shopping centers (whether mall or strip), industrial and office building leases frequently require that the tenant pay all or some portion of the landlord’s operating expenses to maintain the center in good operating condition.
The tenant can protect itself by seeking a general caveat added to all leases—that an expense can only be those reasonably necessary to maintain the project in ‘safe, clean and good operating condition.’ Second, an informed tenant will seek an audit right of the landlord’s books and records with a negotiation revolving around the cost of such audit. Rarely is this audit right used but the risk of an audit frequently deters sharp landlord practices.
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