In this article, you'll learn:

• How to compare current OPEX with the base year costs.
• The impact of gross up provisions on your expenses.
• The importance of promptly notifying landlords about any reconciliation errors.

Generally, commercial landlords send out operating expense (OPEX) reconciliation statements for the prior year 90 to 120 days after the end of the calendar year.  Many tenants receive a bill that does not provide sufficient explanation of the total amount billed or provide supporting documentation.
 
Typically, most commercial landlords assume that tenants won’t check expenses they are asked to pay as part of the lease arrangement.  It is common for tenants to overpay their share of expenses.  Most overcharges happen because of honest mistakes, new software used for calculations, or an overzealous professional trying to increase the profitability of the property for their client.
 
It is important that the tenant understands their fair share of expenses. Here are three things tenants need to be aware of when performing an operating expense reconciliation: