Verify the accuracy of service charge settlements with our expert support. Newmark Polska provides cost audit services.
The importance of a cost audit
Property maintenance and operating costs are a key aspect of office space management. A cost audit involves defining and carefully examining individual items that make up service charges, enabling tenants to distinguish office maintenance expenses from other costs related to leased space. It helps verify whether settlements are accurate and identify errors or ambiguities in documentation provided by the property manager or landlord. The result: greater financial transparency and tangible savings.
Verification of service charge settlements and cost audit timeframes
Commercial property tenants typically have several weeks to a few months to verify the accuracy of service charge settlements for the previous accounting year. Service charges are usually paid monthly in advance and then settled annually. This means that tenants should receive their service charge statements by the end of the first quarter of the following year. After that, access to invoices, contracts or bills may be restricted. In practice, while tenants often focus primarily on base rent, service charges may account for as much as 20-25% of the total amount.
A cost audit carefully reviews all documents related to services provided for tenants, including utilities, cleaning, security and maintenance costs, as well as local taxes and sewage fees. It also examines contract terms and the reasonableness of individual cost items. As a result, tenants gain full control over expenses and settlement transparency, which facilitates budgeting. Additionally, a cost audit can reveal opportunities for technical improvements and identify areas where operating costs could be optimised.
Transparency and protecting tenant interests with Newmark Polska
Properly safeguarding a tenant’s interests in a lease agreement is essential. This includes clearly defining the tenant’s share of common areas and providing a detailed list of billed services. It ensures that tenants pay only for ongoing office maintenance, while capital expenses for the building remain the responsibility of the landlord.
Already leasing office space? Consider regular cost audits. Newmark Polska’s experts can help you gain a complete understanding of your office occupancy costs through a cost audit.